I get tons of ads for these retro game consoles. They come with a generic controller and are preloaded with hundreds of games from nintendo, sega, capcom, konami, square-enix etc.
This is essentially copyright infringement, how are these companies able to freely sell these items?
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A lot of the old games are abandonware (legally, an [orphan work](https://en.wikipedia.org/wiki/Orphan_work)), which falls into a legal gray area. The copyright may exist, but the owner may be defunct and thus unable to pursue violations, or extremely difficult to contact. If violations are blatant enough with no attempts at enforcement, the copyright may even legally disappear, depending on jurisutition – this is more common with trademarks, however. Clarifying this area has gotten some, but not much, traction in legislatures.
In other cases, companies have officially said they don’t care, and turned the game into [shareware or freeware](https://en.wikipedia.org/wiki/List_of_commercial_video_games_released_as_freeware), legally adding it to the public domain. In this case, there is absolutely no legal issue with a third-party packaging and selling it.
Combine those with many of the distributors operating from jurisdictions that do not enforce copyright laws very well and you end up with it being nearly impossible to stop. Even if a country is able to stop one distributor, its easy for others to setup, so the government will basically just be playing whack-a-mole. This reasoning is the same reason you find so many counterfeit items.
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