RetroGaming

Not just Nintendo, it's a Japanese thing. (Not to suggest it's unique to them, just look at Disney.)

Nintendo is scared shitless of getting their IP rights taken from them by allowing general usage. For instance, they absolutely hated that old thing where any old person would call any game console a Nintendo because if Nintendo became a generic word for console they'd lose protections for it.

The ridiculous thing is that if I recall correctly this game isn't using Nintendo IP. It's just trying to run on outdated Nintendo hardware. Come to think of it is Nintendo trying to copyright low poly art styles.

Because that is all they got. Even if they make some profit on the sale of the hardware, it is peanuts compared to the game and tie-in sales. Losing control of even a single IP would be a serious hit to them.

https://www.youtube.com/watch?v=i13hrynnGNY

While the ultimate issue is Nintendo's IP, obviously you can't remove Nintendo's IP in this case since it's for the N64, so the only other option is to remove valves. I understand why valve doesn't want to implicitly endorse an N64 game with their IP by saying nothing, but if they remove valves IP then all that's left is a generic N64 hobby project which Nintendo wouldn't bother acknowledging.

It sounds from the article like the ultimate issue is use of Nintendo IP, not Valve’s.

But it wasn't Nintendo of America who issued the takedown. It was Valve and they don't represent Nintendo.