If you want a clearer picture of Nintendo's past dealings with unlicensed distribution of games for their consoles you should have a read of this section of the article on the Nintendo Entertainment System.

http://en.wikipedia.org/wiki/Nintend...licensed_games

Nintendo has lately loosened it's previously very HIGHLY restrictive policy on licensing practices, but as we've seen with them since the time of the original NES this has fluctuated from generation to generation of consoles. Mostly due to things like; NES10 lockout chip bypassing, UltraHLE, the fall of Sega and competition with Microsoft & Sony, etc...