Last July, Nintendo went nuclear over ROM sites that were giving people access to pirated versions of classic Nintendo games. The first two sites that Nintendo took legal action against were LoveROMS.com and LoveRetro.com; both owned by the same people. The legal action against the two websites resulted in smaller ROM sites shutting down, out of fear they would be next on Nintendo's hit list. The legal action against LoveROMS.com and LoveRetro.com is now over as Nintendo, and the site owners Jacob Mathias and his wife have decided to settle the case.
It seems that Mathias and his wife knew there was no fighting the Nintendo legal machine and entered into a negotiation to stave off a lengthy courtroom battle. The two websites are no longer operating, and part of the settlement requires that the domains be turned over to Nintendo. The deal also includes an agreement to a consent judgment and permanent injunction that resolves all of the outstanding disputes.
Court documents show that both Mathias and his wife have admitted that the operation of the websites constituted direct and indirect copyright and trademark infringement and that the offense has caused irreparable damage to Nintendo. On paper, the couple has agreed to a $12,230,000 settlement. Speculation suggests that the couple won't be paying such a massive judgment to Nintendo as they presumably lack that kind of money. The assumption here is that the couple agreed to the enormous judgment so Nintendo can use this as a deterrent to any other ROM site operators that might be on the fence about closing up shop.
When the MPAA sued a website called Hotfile years back, the suit resulted in the MPAA winning a judgment for $80 million. However, the real settlement behind the scenes was said to still be a massive, but much more affordable $4 million. Presumably, the couple in the Nintendo case will actually pay a much lower amount than the $12 million