Following the cracking down on potentially illegal ROM sharing by Nintendo, two major ROM hosting sites – LoveROMs and LoveRETRO – were both essentially shut down by the publisher.

Now, former site owners Jacob and Cristian Mathias have agreed (via Torrent Freak) to a settlement with Nintendo to pay out over $12 million in damages. The proposed terms naturally bar the duo from running a ROM-sharing website ever again, as well as hand over all digital files for ROMs and emulators – and ownership of the two websites.

Speculation is swirling that the twelve million settlement is meant to deter others from continuing ROM-sharing sites, or from starting up new ones, and that the actual settlement total will be much lower and agreed to in private.

Lastly, while the settlement hasn’t been signed by a judge – it seems like this is finalized. LoveROMs.com now points to a single page with plain text apologizing to Nintendo.

Owning and sharing ROMs is a legal grey area – there really isn’t any legislation to deny users access nor support their access to the files. A long-held belief is that owning the original game disc or cartridge entitles you to ripping the data to a digital ROM or ISO file, the same with music. However, there’s an argument against them as sharing them could lead to piracy of games.

While Niche Gamer is obviously against piracy, we are pro consumer and definitely for the preservation of games – having ROM or ISO backups for physical game copies helps prevent losing your games due to old age and decay of physical media. Until legislation or regulation for digital backups of games is enacted, the legality of this practice will remain murky.

How do you feel about sharing ROMs? Sound off in the comments below!