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This is, IMO, the only reason that this should have been stopped:
All the devices were fitted with non-certified batteries and electrical circuits and did not meet EU technical or safety standards.
Other than that, forget it. Nintendo and CAPCOM aren't making significant amounts of money from Super Mario Bros. or Street Fighter II.
Fact is these devices are not illegal because they can run retro games. What is illegal is selling them with the games inside.
If the batteries were not legally compliant, that's a whole different matter. But the article puts the focus on how they could play "licensed" games and were illegal when that's a blatant lie. These consoles are completely legal (from a copyright standpoint) if they are sold without any games and you then get the games by yourself.
Aren't these things usually expensive because they're being passed off as genuine collector's items?
Possibly, although the article was not clear on that point. That would definitely be a legal issue. I just object to the ROMs part.
What's with the wording used in this article, fake, imitation? They look like the original games. If someone copied a book and sold it, violating copyright laws, you wouldn't call it a fake book.