It's kind of undetermined whether or not someone playing a game is a creative work that falls under fair use. Obviously, given the billions of hours of this on Twitch and YouTube, it's obvious that it is. Game studios seem to desire control; vetting who plays their game, and controlling the message, but they aren't taking these grievances to court in a way that matters. Nintendo knows that they would lose Nintendo v. YouTube (and YouTube is an obvious target because they take revenue on every game in aggregate, not just pocket change that the content creators see), and that's why they don't pursue it.

So to me it's a settled legal issue. The risk that the big studios run by keeping it a grey area is that some tiny studio decides to litigate it, and loses horribly. It's an interesting calculus and I'm surprised it's been a stalemate for so long.

Even if the game companies win this battle, they'll have to admit that playing their game isn't a creative work, it's just watching a movie, which is probably ground they're careful about treading on. "Yeah you don't really do anything, you just watch it" does not extract $60 from people's wallets.

My take is, whenever large companies say "X is illegal" but haven't won a lawsuit, it's actually the opposite. They know they're going to lose, so they don't dare ask a court to rule. When something is obviously illegal, you litigate it, and win.