Comment by willis936
1. Character of the use. Commercial. Unfavorable.
2. Nature of the work. Imaginative or creative. Unfavorable.
3. Quantity of use. All of it. Unfavorable.
4. Impact on original market. Direct competition. Royalty avoidance. Unfavorable.
Just because the courts have not done their job properly does not mean something illegal is not happening.
All of these apply to emulators.
* The use is commercial (a number of emulators are paid access, and the emulator case that carved out the biggest fair use space for them was Connectix Virtual Game Station a very explicitly commercial product)
* The nature of the work is imaginative and creative. No one can argue games and game consoles aren't imaginative and creative works.
* Quantity of use. A perfect emulator must replicate 100% of the functionality of the system being emulated, often times including bios functionality.
* Impact on market. Emulators are very clearly in direct competition with the products they emulate. This was one of Sony's big arguments against VGS. But also just look around at the officially licensed mini-retro consoles like the ones put out by Nintento, Sony and Atari. Those retro consoles are very clearly competing with emulators in the retro space and their sales were unquestionably affected by the existence of those emulators. Royalty avoidance is also in play here since no emulator that I know of pays licensing fees to Nintendo or Sony.
So are emulators a violation of copyright? If not, what is the substantial difference here? An emulator can duplicate a copyrighted work exactly, and in fact is explicitly intended to do so (yes, you can claim its about the homebrew scene, and you can look at any tutorial on setting up these systems on youtube to see that's clearly not what people want to do with them). Most of the AI systems are specifically programmed to not output copyrighted works exactly. Imagine a world where emulators had hash codes for all the known retail roms and refused to play them. That's what AI systems try to do.
Just because you have enumerated the 4 points and given 1 word pithy arguments for something illegal happening does not mean that it is. Judge Alsup laid out a pretty clear line of reasoning for why he reached the decision he did, with a number of supporting examples [1]. It's only 32 pages, and a relatively easy read. He's also the same judge that presided over the Oracle v. Google cases that found Google's use of the java APIs to be fair use despite that also meeting all 4 of your descriptions. Given that, you'll forgive me if I find his reasoning a bit more persuasive than your 52 word assertion that something illegal is happening.
[1]: https://fingfx.thomsonreuters.com/gfx/legaldocs/jnvwbgqlzpw/...