They’re still taking something they didn’t make and selling it as though they did. I have every right to write and film a Batman movie, spend as much time I want making it professional, and then show it to people, as long as I don’t charge them for it. That doesn’t give Fox or whoever the right to take my movie and charge for it instead. Even if I did break the law by making people pay for it, the actual owners would only be entitled to that money, not to go make mroe money off of it themselves. It’s still my work even if it uses concepts invented by someone else.
There’s a reason every franchise under the sun has mountains of fanart and fanfic without the companies that own them trying to take control of it: it’s blatantly illegal.
Xbox emulation looks underdeveloped compared to PlayStation and Wii, but from what I can tell Xenia has come a long way in the last couple of years. If you’re willing to give it a go, you could try ripping the games off your discs and just play on PC