Even if it would have the right to do so as IP owner, Nintendo doesn't like killing projects from fans who just love its games.

At this point, people who grew up with the NES are in their mid-to-late twenties, which means that Nintendo's iconic characters are like family to them - and it shows. You have fan-made videos, Mario and Pokemon game hacks, and entire musical acts whose sole purpose is to play Metroid music. You even have epic, full-length serials based on Nintendo properties.

As these things become increasingly common, a Nintendo shareholder asked the company last month if it planned to take any action to protect its IP: "Recently, there are many fan magazines, original short movies, music bands, cosplay activities, websites, orchestras and so on, based on Nintendo's titles. If these activities threaten Nintendo's intellectual properties or licenses, will Nintendo crack down on them aggressively, or just view them as fan activities?"

Nintendo big boss Satoru Iwata admitted that it was hard to draw any definitive line on the issue, because there were no "clear-cut" criteria with which to judge. Still, was it fair to punish people who just did things because they loved Nintendo's games? "Of course, we cannot say that we can give tacit approval to any and all the activities which threaten our intellectual properties. But on the other hand, it would not be appropriate if we treated people who did something based on affection for Nintendo, as criminals."

If there was any sort of defining line, said Iwata, it was "whether the expression in question socially diminishes the dignity or value of our intellectual properties or not." In that case, Nintendo would have to take action - as it did in April when it killed a fan-developed Pokemon MMOG.

So as long as whatever you're doing doesn't "diminish the dignity or value" of Nintendo's properties, it looks like you're good to go, Mario and Zelda fans.

This seems like a very sensible stance to take. On the one hand, a company is obligated to defend its IP lest it become effectively worthless and out of its control. On the other hand, do you really want to slap the proverbial cuffs on someone who is going to a great deal of effort because they love the things you make?

(Nintendo Shareholder Meeting Transcript via Kotaku)