I wouldn't say games are in between, but that they are part software and part art. software, like everything else that does a practical job, brings in the reasoning that justifies requiring the four essential freedoms. the art in a game, though irreplaceable as art, do not involve the same moral and philosophical issues, so the imperative of the four freedoms does not apply to them. as far as the practical job is concerned, the art is generally replaceable. consider for example gcompris' puzzles made of famous paintings. nevermind that the paintings are in the public domain. if they were under copyright, as long as they were redistributable, it would not be unethical under the FS philosophy to bundle it with the puzzle software. furthermore, one could still fully enjoy the essential freedoms when it comes to the practical job of allowing users to solve puzzles, though for some kinds of changes one might want to make, one might have to replace the artwork with different artwork. this is my understanding of how FS philosophy applies to (software + art) games. whether they are emulated is irrelevant under this light, assuming the emulator does not amount to means to take away users' freedom.

I don't know what you mean by "game launcher". I'm used to installing and playing games that ship with distros.