The Dolphin project has broken the silence regarding their legal tussle with Nintendo and Valve, giving a far more detailed elaboration of what, exactly happened.
First things first – Nintendo did not send Valve or Dolphin a Digital Millenium Copyright Act (DMCA) section 512(c) notice (commonly known as a DMCA Takedown Notice) against our Steam page. Nintendo has not taken any legal action against Dolphin Emulator or Valve.
What actually happened was that Valve’s legal department contacted Nintendo to inquire about the announced release of Dolphin Emulator on Steam. In reply to this, a lawyer representing Nintendo of America requested Valve prevent Dolphin from releasing on the Steam store, citing the DMCA as justification. Valve then forwarded us the statement from Nintendo’s lawyers, and told us that we had to come to an agreement with Nintendo in order to release on Steam. Considering the strong legal wording at the start of the document and the citation of DMCA law, we took the letter very seriously. We wanted to take some time and formulate a response, however after being flooded with questions, we wrote a fairly frantic statement on the situation as we understood it at the time, which turned out to only fuel the fires of speculation.
So, after a long stay of silence, we have a difficult announcement to make. We are abandoning our efforts to release Dolphin on Steam. Valve ultimately runs the store and can set any condition they wish for software to appear on it. But given Nintendo’s long-held stance on emulation, we find Valve’s requirement for us to get approval from Nintendo for a Steam release to be impossible. Unfortunately, that’s that.
The post also goes into greater detail about the Wii Common Key that’s been part of Dolphin’s codebase for 15 years. This key was originally extracted from the GameCube hardware itself, and a lot of people online claimed that Dolphin should just remove this key and all would be well. After consulting with their lawyers, Dolphin has come to the conclusion that including the key poses no legal risk for the project, and even if it somehow did, the various other parts of the Dolphin codebase that make emulation of original games possible would pose a much bigger legal threat anyway.
So, the team will keep on including the key, and the only outcome here is that Dolphin will not be available on Steam.