Nintendo Forcing Garry's Mod To Delete 20 Years' Worth Of Content

I guess they antagonize anyone that has moderate exposure using their IP

In some countries copyright law says that if you let people use your copyrighted material with little to no impediment then you cannot suddenly request whoever is using your material to stop

Let's say that Nintendo allows fans to make fan made Mario games for 5 years. Then they suddenly sue everyone and say "hey you have to pay for copyright or shutdown". A judge can decide that since they didn't enforce their copyright for some time they cannot sue people that are using their IP.

From a legal perspective the act of policing your own copyrighted material is the company's responsibility. This law prevents companies from relaxing their copyright claims for years (essentially allowing people to use it) and then suing everyone for using their IP. In other words Just let everyone use it, then sue them. The law is there to prevent that

Nintendo is likely super strict because "let people use your copyrighted material with little to no impediment" has room for interpretation in a court room. So they go to the conservative side and shut down everyone. Also consider that they're right next to China. The piracy capital of the world. It's not a surprise they're scared about their copyright.

I'm not saying that what they're doing is right. It's not. But I see where it comes from.

People that don't know of this (or don't care) will indiscriminately buy their products. To unseat them it would require a handheld that targets the same market and a killer game for that handheld.

Anti Commercial-AI license

Nintendo is a "family friendly" brand before all else and really only cares about the experience of children playing their games and adults buying their games for children to play. They count on their core IPs to draw in those kids as adults, but don't put much effort in catering to an adult audience. They put more effort in with the Switch (game store with more adult oriented games), but still minimal effort - their original properties are family friendly.

They see other people using their IP as diluting their brand value rather than promoting it. They think their characters are what makes people nostalgic for their games and drives brand value. So they want you to only be able to see your "favorite Nintendo characters" from Nintendo official sources and have complete control over that experience.

I think they're wrong about most of that. The characters are, for the most part, pretty generic and simple. What people like about Nintendo is that the games are accessible, they played when they were kids, and they were often introduced to those games by parents or older siblings. There's a social context to Nintendo games that is unique and nostalgic. They're often some of the first games you play as a kid, and they're the first games you think of when you want to introduce your own kids/nieces & nephews, etc. to gaming. I don't think that unofficial Super Smash Bros tournaments or Gary's Mod having fan-made Mario models in it dilutes that in the slightest but Nintendo does drive away adults who are the primary drivers of the Nintendo brand's popularity (as they are the purchasers). Once it's these young adults' turn to share Nintendo games with the next generation, I think Nintendo's litigiousness will hurt them because it will have driven many of these people away.