Also, as Nintendo can argue, imagine this was a movie. Imagine it was a movie being shown on screen for two hours. That would be case closed. Now imagine it was a movie recutting competition. Again, case closed. So what makes a tourney special? In the eyes of the law, a judge might say, absolutely nothing.
You might argue, “well, there’s skill being applied, whereas a movie is passive.” No dice there - just because you put effort into your copyright violation is meaningless. You might argue a movie is a full work when a video game only displays a subset - but do you think you could publicly perform 30 minutes of The Lord of the Rings and be OK? Of course not.