The emulator thing is less "improve relationship" more "avoid appearing complicit" just basic avoidance of liability.

If I recall correctly, there was also the issue that a Nintendo 64 ROM of their game would be fundamentally incompatible with Steam, which (as many forget) is technically their DRM solution. I could be wrong, of course.

> And Valve it seems wants to improve their relationship with Nintendo

Valve are the 200kg gorilla of the gaming industry and can throw their weight around.

However Nintendo are a 250kg gorilla.