Let's think about this worthless home market...
A typical cart run from 1994 to 1998 (kof, ss, LB):
5000 home carts (US and Jap),
$200 a cart wholesale
---------------------
1,000,000 (at least)
Take into account that SNK also sold retail, which means that the gross was probably higher.
I know you're saying, 5000 carts?! who's going to buy 5000 carts, but if you see how big SNK still was in Japan, Korea, and other parts of Asia, and how Asian people don't often come to US sites and make their presence known (because they don't like to type in English) then you'd agree, 5000 seems about right, especially for the big name carts I pointed to (kof, ss, lb).
And so each year from 1994 to 1998 they'd be pulling in around $2,000,000, off of TWO titles alone! And then you look at the smaller titles that they also sold in tandem with the big names, such as Metal Slug 1 & 2, breakers, kizuna, ninja masters, pulstar, blazing star, fatal fury 3, RBFF 1, Special, and 2, and Super Sidekicks 2,3,4 - you get the idea (MSX, STSS, MS3, S1945+, & MotW were all made after 1998, so I don't count them, but you know they made money). Home carts were a pretty lucrative side market.
Even if you cut my production figures by 60% (you can't successfully argue that SNK made less than 2000 KoF carts in any given year) - even if cut by 60% SNK is still making over a million a year gross - not an insubstantial figure.
But really, MVS games amde the money, and with emulation, poor ass gamers like ImMature could stop picking through their parents pockets for quarters and stay home, playing "arcade perfect" games on the layaway discount PII they picked up at RadioShack.
And of course Neo Geo games were the first to get the royal treatment, with the new games dumped and made public only days after their release (Metal Slug X), and so why would an arcade op invest in that game? Kids are staying home to play it, just as they stayed home to play KoF 98.
It wasn't SNKs fault that people could break their encryption, or protection scemes and spread the roms on the net. People are actually just really smart sometimes.
So SNK had to rely on the countries that aren't so computer heavy, like in South America with Brazil (yes, they have a lot of computers, but the population is not as computer crazy and sloth-like as in the US), and eventually the MVS was just not supportable. This of course began in 1998 with the release of KoF 98 roms, only a few months after the MVS release (how generous... then again, it was released almost immediatedly after they dumped it).
So yeah, emulation has hurt the MVS market. It hasn't hurt all the companies. It didn't hurt Nintendo because most people couldn't play the roms on their computer with substandard graphics cards, and the fact that N64 emus all sucked. It didn't hurt Sega, or Sony, and it didn't hurt Capcom, but then again, I think the dumpers were way too kind to Capcom. All the CPS games coming out 2 1/2 years after Street Fighter Alpha 3. Arcade ops easily made a return without worrying about Capcom games eing emulated.
It did hurt SNK.