That is true.
I like to imagine Nintendo Ninjas are ninjas that are both private mercenaries and part of Nintendo's legal department. Nintendo will send a cease and desist. If you don't comply, they may send the ninjas.
They also send out the ninjas to threaten consumers who use grey-areas outside of Nintendo's legal reach to get what they want.
I mean, if my computer was utterly destroyed, would you believe me if I said "Ninjas destroyed my computer for playing Pokémon Legends Z-A on an emulator!"?
Also, given how old and renoun Nintendo are, to the point of a cultural icon of Japan. I wouldn't be surprised if Nintendo has history with real-life ninjas.
While Nintendo had ninjas, SEGA a had better and scarier organization ... Yakuza!
No, not Yakuza the game franchise, real Yakuza!
Well, it's just a rumour but it's making sense since back then SEGA has many arcade centres all around Japan and the easiest to protect them by getting along with Yakuza.
Based on interview in John Szczepaniak's The Untold History of Japanese Game Developers series, the interviewee - speaking under the catch-all pseudonym Hideo Nanashi, tell this story when he hired a truck-mounted crane to drop an arcade machine in front of the rival company's offices to show he meant business:
"It was one of their game machines. I dropped it in front of their offices, smashed it. And I told them that one of their employees would be next. To show them that I was serious. That way they would feel ashamed of their actions, you know? It was easy for me to get a [REDACTED] arcade cabinet cheaply, so I bought one from a distributor.
I thought about robbing a [REDACTED] arcade, too, but that's much more difficult, and that would make me a criminal. With what I ended up doing, I could have been charged with something like unlawful dumping of garbage, but that's a minor offence. Whereas if I had robbed a [REDACTED] arcade, I would have been arrested. [REDACTED] was well-versed in using the underworld to get what they want, so if you're going up against them, you have to be smart. They're a big company, so if you try to fight them with ordinary methods, they'll work with the police and get the legal system to come after you. They might even pay off a politician, like a member of the National Diet. Who knows what they're capable of?
I just smashed it in front of their main office in the middle of the night. It was easy. The [REDACTED] headquarters are in [REDACTED] now, but back then they were near [REDACTED] Airport. Their office building was right in front of a major street, in a commercial district without any residential homes."
Also based on the interview, it's not just SEGA who uses Yakuza, other big gaming companies too. In Japan, you have these evil companies that always crop up, and unlike the West, in Japan there's a perception that "play" is bad, the opposite of hard work. So amusement-oriented industries inevitably become infested with evil companies and ties to the underworld. Take arcades, for example. In legal terms, they're covered under laws regarding the entertainment and amusement trades. So they're managed under the same laws that regulate the adult, or "pink", industry. Because of that, the underworld gets involved. The only companies that have been able to do business while staying clean are probably Nintendo and Namco.
