When somebody drinks Pepsi in a movie it's considered advertising and the movie company gets paid for including the product, when somebody makes a show full of entertaining gags around a video game, Nintendo is the first to cry bloody murder. Stop being a caveman and get real.
A full Let's Play is not "show full of entertainment gags around a video game", it might as well be the video game.
These huge Let's Players on YouTube do full-scale video playthroughs on any video game. It's not just simple clip review with a couple gags, they display the entirety of the game; all of its content being shown from point A to point B. Non-profit Let's Plays are one thing, but people with a YouTube partnership recording an entire walkthrough of a video game with minimal video editing (putting overlays and putting fancy text over a video with the majority of it being recorded material is not hard work, I can say this out of my own experience) without permission from the owner of the intellectual property and then profiting off of it is fucking ludicrous. It might as well be akin to uploading an entire movie on YouTube and calling it advertising, because unlike a game trailer you've just experienced the entire game.
You can not tell me that seeing someone drink a Pepsi on a commercial is akin to watching a Let's Play because they are nothing alike. You do not experience what it is like to drink a Pepsi when you see someone else drink one, however with Let's Plays you just got the full experience of what game you just watched and there really is no need to go buy it yourself now. With this though, you can argue that you aren't experiencing a game by just watching it, you have to play for yourself. In some cases this is correct, however the Let's Play games of choice are always story-centered, linear progression type games that for the most part can be experienced just by watching it.
Let's Playing isn't advertising, it might as well be compared to fucking
video game piracy. Why not? I'm not seeing any difference between the two other than that someone else is playing for you. You can make any snarky joke you want but that comparison holds pretty well because all of the games content is right there without any pay-wall for your end. Hell, it can be argued that it is even worse than piracy because the ones providing the videos are making a fucking profit.
As far as free advertising is concerned, Nintendo's YouTube advertising is pretty solid as you got a multitude of game trailers and Directs are always streamed and uploaded there. Nintendo's weakness when it comes to advertising is anything outside of the internet. I'm sure Nintendo doesn't need to rely on people uploading the entirety of a game as advertising.
Let's Plays outside of their entertainment value they might bring to some people is just a joke. These uploaders have no legal grounds to stand on in regards to this medium and if publishers want them down they have every right to take them down. Don't get me wrong I'm not just defending Nintendo because I'm some nintendog I'm arguing this because making primary income off of something that isn't yours is completely dumb. If this were EA or Activision making this kind of a move I'd probably be defending them on this too.
It's just morally wrong, and if you don't care about whatever morality is associated with it then fine. Won't stop the publisher from taking you down.