Retro Game Prices Are Being Manipulated, Lawsuit Claims

Wata Graded retro games await their fate at a Heritage auction.

ScreenshotHeritage Auctions / Kotaku

The market frenzy leads to record prices for retro games seems to have slowed down since last year, but mid-peak collectible frustration has not. Earlier this week, a number of Wata Games clients filed a class action lawsuit in an effort to end some of the seemingly shady business dealings that have allegedly fueled the recent gold rush in classic games like Super Mario 64 and The Legend of Zelda

Filed in the Central District Court of California, the class action lawsuit (Spotted for the first time by podcaster Pat Contri) is on behalf of Jacob Knight, Jack Cribbs and Jason Dohse, as well as other potentially “similar” individuals. They accuse Wata Games and owner Collectors Universe of inflating a bubble around retro games collecting, misleading customers and a “pattern of extortion activity.”

The way it works is that collectors send their games to Wata to determine how pristine and rare they are. Wata charges a fee to speed up the process and a 2% commission on games valued over $2,500. And now some of those collectors are claiming that Wata ripped them off by hyped up the retro game market and then charging a premium for its services, while game owners failed to return in a timely manner.

Wait times for collection companies have increased during the pandemic, but some of the reported delays at Wata are particularly long. The longest estimated wait time is 150 days. However, a customer showed Kotaku screenshots of their order to have a copy of Fire Emblem: Path of Radiance for the GameCube reviewed. It was originally posted in November 2020. They said they only got it back this week, over 18 months later.

Wata Games did not immediately respond to a request for comment.

The lawsuit’s other allegations of broad market manipulation are nothing new. In fact, most allegations stem from a mini-documentary on this topic published by YouTuber Karl Jobst last August. It accused Wata Games, the Heritage Auctions house and several collectors of conspiring to inflate the value of (supposedly) particularly rare retro games through subjective reviews, secret bidders and record-shattering sales prices.

Much of the criticism from Jobst and others at the time focused on a few key events. The top price for a retro game in 2017 was $30,000 for a high-quality sealed copy of Super Mario Bros. In 2019, a Wata-reviewed copy of the same game sold for an eye-watering $100,150 through a widely publicized private auction† The buyers included three people, including the founder of the Heritage Auctions house, Jim Halperin. Later that same year, Wata founder Deniz Kahn (the big leaguer) went on the TV show Pawn Stars to say the same copy was worth a whopping $300,000. Last year, what Wata described as an ultra-rare boxed and sealed variant of Super Mario Bros. sold for $2 million

A VGA-rated copy of Super Mario 64 is on sale at Goldin Auctions.

Kahn, Halperin and others mentioned in Jobst’s documentary denied any wrongdoing and to be fair no evidence of actual fraud has ever surfaced. A few months later, Wata began to meet a widespread demand from collectors by: release population reports for different games. In the world of collectibles, population reports are approximate guesses about how many sealed items, in this case games, of a particular quality still exist in the wild based on research and previous work. They are incredibly useful to collectors and showed a greater transparency of Wata. Strikingly, there have been no record-breaking retro game auctions in the months since.

in a updated video posted last December, Jobst pointed out that two copies of Super Mario 64 had recently sold for much less than at a Heritage Auctions auction earlier that year. At the Heritage auction in July 2021, a Wata-rated sealed specimen with a “9.8 A++” rating sold for $1,560,000† At an auction of competing auction house Goldin Auctions in September, a copy with a similar rating went for only $800,000† When at a Goldin auction in October, a copy of the game (rival to the Wata rating industry) had VGA rated as “MINT 95” went for only $240,000† Those prices would have been unthinkable a few years ago, but the signal is that the retro games market has recently undergone a major correction.

Whether the new class action lawsuit against Wata will lead to anything is an entirely different question. “Plaintiffs demand an injunction against [Wata] to immediately stop making false statements about expected turnaround times for the assessment services,” it reads. Those who sue also want “refunds” for delays and the potential difference in commissions if retro game prices weren’t too high.

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