The lawsuit filed against Modded Hardware claims that Nintendo contacted Daly in March and threatened to sue him unless he stopped selling modded Switch consoles and MIG Switches (which enable pirated Switch games to be played on unmodded hardware).
According to Nintendo’s complaint, Daly agreed in March to stop selling the unauthorised devices, but continued to do so, claiming that he was looking for a new lawyer.
Nintendo therefore filed a complaint at a federal court in Seattle, accusing Daly of six charges including “trafficking in circumvention devices” and copyright infringement.
The lawsuit claims that Daly not only sold mods to customers, but also offered a mail-in service which enabled players to send in their Switch consoles and have them returned modded, often with pirated games installed.
“Defendant not only offers the hardware and firmware to create and play pirated games, but he also provides his customers with copies of pirated Nintendo games,” the platform holder’s complaint says.
“Typically, when a customer purchases a hacked console or the circumvention services, Defendant preinstalls on the console a portfolio of ready-to-play pirated games, including some of Nintendo’s most popular titles such as its Super Mario, The Legend of Zelda, and Metroid games.”
Nintendo is seeking financial damages from Daly, as well as the complete shutdown of his website. It also wants him “to deliver to NOA all circumvention devices, hacked consoles, and any other physical or digital copies of materials that infringe or violate any of NOA’s rights”.
“Defendant became a leading (if not the primary) moderator of the SwitchPirates Reddit community, which he helped grow to nearly 190,000 members,” Nintendo’s complaint says.
“Since 2019, Defendant has posted thousands of comments and messages to the SwitchPirates Reddit Group. Defendant’s posts have included, by way of example, messages directing users to the Pirate Shops […] and offering technical advice and encouragement to other users about how to use the Pirate Shops, how to download and install Circumvention Software, and how to play pirated copies of Nintendo Switch games.”
The complaint claims that Williams has been involved in three ‘pirate shops’ which have since been closed, and claims that a fourth is still active.
It also provides quotes of Williams stating on Reddit that he refuses to pay Nintendo money for its products.
“Defendant is well aware that his conduct is unlawful and infringes Nintendo’s intellectual property rights,” it says. “Indeed, Defendant has bragged publicly that he is a ‘pirate’ who ‘[isn’t] going to give Nintendo $50 for a game’.”
Highlighted Nintendo's quotes.
If the quote is accurate, he went a step further and put pirated games on the devices. Even if pirating the game is legal in some way (he owns it legitimately so putting a copy is fine or something), sending such devices out to customers then means he's also distributing pirated games.
That said, somebody in the comments claimed he didn't distribute games, but rather software that made it easy to pirate games - I don't know what the precedent is for that being considered illegal, but it does call the original claims into question.