Copyright
In some countries, it is legal for an individual to personally make backup copies of a game they own. Individuals may make backup copies for various reasons, perhaps as insurance against losing the game or as redundancy in the event that the original game's medium becomes unreadable. See the section on ROMs and Preservation.
However, in the U.S. it has been illegal since 1983 for a user to create their own backups of video game ROMs onto other cartridges. This was decided in the court case of Atari v. JS&A. JS&A manufactured a "game backup" device that allowed users to dump their Atari ROMs onto a blank cartridge. JS&A argued that the archival rule allowed for this. The court disagreed, noting that ROM media was not subject to the same volatility as magnetic media (for which the law was created). Thus, not being so relatively vulnerable, ROMs were not applicable under section 17 USC 117(a)(2).
Chuck Cochems has put forth the argument that copying a legitimate item of software specifically for personal use with an emulator is legally justifiable under principles established by the Sony v. Universal ruling, particularly with regard to personal use being favorable towards justification under the fair use doctrine.
Some games companies, such as Nintendo, print warnings inside their game manuals that they do not allow users to make backup or archival copies. Whether or not these warnings in this specific form can be considered valid contracts is legally questionable. For an overview of relevant issues, see user agreement (EULA), shrink wrap contract, clickwrap, Fair Use, Fair Dealing and DMCA.
ROM images may be directly licensed by the rights holder. For example, Atari once made a number of their original arcade games available in ROM format which is compatible with the MAME emulator through the online ROM retailer Star ROMs. Nintendo provides a service on their 7th generation console, the Wii, that allows players to purchase old games from various systems, such as the NES, which will download a ROM image and emulator upon purchase (see Virtual Console). This is similar to the PlayStation Store re-releases of games for the original PlayStation for the PlayStation 3 and PlayStation Portable, and the Xbox Live Arcade's re-release of many old video games such as the original Sonic the Hedgehog for the Xbox 360.
The vast majority of computer and video games from the history of such games are no longer manufactured. As such, the copyright holders of some games have offered free licenses to those games, often on the condition that they be used for non-commercial purposes only. For example, fourteen of the games emulated in MAME, including Gridlee and Robby Roto, have been made available under such licenses and are distributed by the MAME project.
Read more about this topic: ROM Image