The big reason these people get away with it is because there's less than a 1% chance of any punishment. The police don't care because they have other things to worry about. Game companies? Well sure, you can report these people and Nintendo MIGHT send C&D letters out(which is usually sufficient. The threat of a lawsuit will make most of them stop) but there is little chance they'll be punished in that regard. Especially as they're doing it in a small term operation which will keep them under the radar. What do they have? A hotmail address? A dynamic IP that craigslist MIGHT hand over? Sure the police could set you up and arrest at the meet but there is a greater chance of an alien invasion than the police even considering that. They'd treat it as a civil matter and only if the game company is involved.
Now it's not even a matter of finding ROMs. You can find a pre-packed ROM set with an emulator on a torrent site, all ready for you. Grab it, burn to some cheap discs, sell them. The buyers aren't even people who should "know better", it's typically mothers and grandparents who think they're buying a cheap gaming alternative for their kids and have no idea this is piracy.

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