For a good while, there was a bit of hype built around the Xbox Series S, in particular for the retro gaming scene. It was a cheaper device that offered a small form factor. Likewise, it allowed consumers to download emulators and enjoy various retro video games. But while this process was available, some consumers were skeptical. Of course, it didn’t take Microsoft too long before they outright banned emulators from being available in the marketplace, making it impossible to download and enjoy. That’s just the emulators being used in the Xbox Series X/S retail mode.
RETAIL MODE ON XBOX IS DEAD!
15-day suspensions handed out to users of retail emulators as a warning shot from Microsoft.
Devs warning users to delete emulators
Retail Mode team disbanding and shutting down the Patreon.
Sorry to bear the bad news. RT to warn others
I wouldn't be surprised if this was a direct response to Nintendo's legal threats over dolphin aiming for a steam release. Retail mode emulation worked because the emulators were published on the Microsoft store, and Microsoft would have exactly zero interest in getting themselves involved in legal trouble over it.
There weren't any legal threats by Nintendo over dolphin. Valve approached Nintendo asking "are you cool if we distribute a GameCube & Wii emulator on our platform?" And unsurprisingly, Nintendo said no.
I don't know where this rumour about a cease and desist comes from, the dolphin devs have said that this did not happen. They did cite the DMCA, though, so I guess you could see this as a legal threat.
Edit: okay, the rumour comes from an earlier blog post by the devs where they do claim that, but they are reverting that statement