Heritage Auctions and Wata Games sued for manipulating retro game prices

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Game grading company Wata and auction house Heritage Auctions are accused in a class action lawsuit of artificially inflating prices for retro video games to increase their own sales. Retro games sometimes go for millions of dollars.

Wata Games is a company that, for a fee, estimates how much a retro video game is worth before going to the auction house. Wata’s fee for this is about two percent of the estimated value, according to VGC, which has gone through the charges and extensive report is doing. Heritage Auctions’ rate is 25 percent of the sale price, largely from the buyer.

The plaintiffs allege that Wata and Heritage have pushed prices for retro video games unrealistically high through their own valuations, press releases and interviews about broken revenue records, and by allowing employees of the companies themselves to bid in the auctions. With those high prices, the turnover for Wata and Heritage also increases.

For example, a copy of Super Mario Bros, which sold for just over $100,000 at auction in 2019, is said to have been sold to a group of buyers that also included Heritage co-founder Jim Halperin. Then Heritage itself came up with a press release in which it announced the new world record. In a interview with Ars Technica, Wata CEO Deniz Kahn went on to say that $100,000 was still a low figure and that he believed a retro video game would sell for $1 million in the future.

That high amount has also become a reality. In 2021, a sealed copy of Super Mario 64 went up for sale for $1.56 million. That same year, another copy of Super Mario Bros. way for 2 million dollars. The buyers are anonymous.

Prosecutors also point to a report by YouTuber Karl Jobst. It came in 2021, after the two auctions mentioned above, with a video, in which he accuses Wata and Heritage of the same practices as in this indictment. After this video came out, another copy of Super Mario 64 sold for $102,000, earning the same “9.6 A++” rating from Wata. For context, the prosecutors also report that before Wata’s inception in 2017, the record revenue of a game was around $30,000. Heritage and Wata denied all blame to VGC after the video appeared online.

Furthermore, Wata CEO Deniz Kahn and Heritage founder Jim Halperin would appear in an episode of Pawn Stars pretended they didn’t know each other when they didn’t. In the episode, Kahn estimates the value of a copy of Super Mario Bros. at $300,000, while it recently sold for $100,000. The episode in question is said to have been taken offline for unknown reasons.

The skyrocketing prices would have caused a run on Wata’s services, which the company is struggling to cope with. It would have been delayed and failed to notify customers, even though those customers had already paid for Wata’s services.

It is unknown how many people joined the class action case, but VGC estimates that it could be more than 10,000 people, “based on Wata’s average number of submissions.”

This copy of Super Mario 64 brought in $1.56 million

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