this post was submitted on 11 Jan 2024
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No they never said that, the huge problem here is, is that the fangame runs on nintendo licensed hardware using nintendo licensed SDKs. A lot of fangames that mod valve games don't use any steam tools and Valve is still completely fine with the mods.
Legally shouldn't have ever been their problem. If I, without any permission, ported Mario 64 to the Xbox, it would make zero sense for Microsoft to raise issue with Nintendo over it.
Statement's a little incongruous: I would take a fangame that mods Valve games to mean something like a Sonic game built on the Source engine. Regardless, I'm pretty sure I get your intended meaning, and the fact is, there really aren't that many to reference. I can only think of two notable ones off the top of my head, both of which are flash games, and both of which Valve ultimately did profit off of. After digging for a short while, I came up with two others, one being a short celebration of the series made for it's 25th anniversary by a very well-known fan site, and the other being an obscure Unreal Engine project. The only other thing I can think of that might apply is Xash, which they definitely aren't fine with, they just don't have the legal standing to get rid of it without legally endangering every third-party tool made for their games.