That seems like a weak argument, but the courts make all sorts of surprising decisions these days.

In the past, Nintendo tried using their trademark as a watchdog -- the console would reboot if the game did not display it at startup -- then sued unlicensed games for trademark violation. The courts ruled the trademark was purely functional in that use case, and not a trademark, then ruled against Nintendo.

I imagine a similar ruling, if the defense is: The user has a valid key, and a copy of the media. Any circumvention happened before that point in time. We're simply building a compatible device.

Of course, I'm not a lawyer, and the DMCA is a terribly designed law.

Wasn't this same thing a huge deal back with the DVD DRM keys? The keys were leaked, but it's technically illegal to distribute software that uses them in unlicensed ways, even if you don't distribute the keys.

Rather than a value judgment of whether or not Nintendo is rightly applying the law, Yuzu settling must be viewed as a fundamental inability for a small group of independent devs to defend themselves against the deep pockets of a famously litigious major global corporation in the modern court system.

> Nintendo's legal position is that because the emulator will only run Switch games if the user provides decryption keys dumped from a Switch

This is not true, Switch emulators can also run unencrypted games / programs if you provide one.

Games are usually shared encrypted, that's true, but that's just a custom, not something required by the emulator.

if you just dump the decrypted memory, you're not "picking the lock" so you should be safe. (don't believe me: IANAL)