In August last year WATA generated plenty of headlines, as criticism started to mount over the boom of retro game prices amid allegations of wrongdoing from the game grading firm. Claims surfaced alleging that the company was artificially driving high prices, along with claims of collusion with auction house Heritage Auctions; this extensive video by Karl Jobst also did a great deal to bring the allegations to a wide audience.
It's now emerged that a class-action lawsuit was initiated this week in the Central District of California (thanks, VGC). The lawsuit accuses WATA of "engaging in affirmative acts to manipulate the retro video game market, engaging in unfair business practices, engaging in false advertising, making false statements about the turnaround times for grading services and failing to disclose material delays to customers."
The lawsuit does indeed focus on a number of the allegations made in Summer 2021, related to the rating process, high-value transactions and potential conflicts of interest to drive perceived value of WATA-graded games to exceptionally high levels. At its peak a copy of Super Mario 64 sold for $1.56 million at auction, an incredible figure that shocked the conventional retro collector's market. The lawsuit covers a lot of the ground highlighted in investigative reporting last year.
The lawsuit does also raise another, more practical complaint, that nevertheless applies to the broader allegations of market manipulation. There are claims that gradings took months rather than the expected 15 days, and that the company moved HQ (and therefore stock being graded) without informing clients.
Heritage Auctions benefitted by earning more commissions from sellers and buyers. Halperin benefitted from the value of his game increasing. Wata benefitted by the increased notoriety and increased demand for grading services.
Also, the increased value of the games allowed Wata to charge even more for its grading services since prices were tied to values. Yet, the relationship between Wata and Heritage Auctions was still unknown to collectors.
Meanwhile, video game collectors rushed to send in their own sealed games into Wata for grading, believing they could sell the games for profits as the market soared.
Unbeknownst to collectors, Wata was massively bogged down by the rush. Still the company advertised false and overly optimistic turnaround times on its website. Customers were not notified of the delays in advance of their purchases. Wata continued accepting orders and payments from customers.
WATA has previously denied a number of these allegations.
It's likely that the class-action lawsuit will take quite some time, but it's clear that the focus on WATA - its grading services and high-value game auctions - will only intensify.
[source videogameschronicle.com]
Comments 26
could this be the first lawsuit all of NL comes together to cheer on
If WATA wanted to manipulate a market and do money laundering for a few rich sellers, they should have just gotten into NFTs
Grading is the biggest con in collecting.
WATA are clearly manipulating these numbers to fuel their own profits. Videogames don't need to turn into the next "art market" where pieces that are deemed to be worth millions are merely there for rich folk to hide their money from taxes.
Good. They’re absolute charlatans lining their own pockets.
Never knew video game collecting could get this political.
Good, this "grading" is ruining it for physical collectors like me
Good to see it, though the damage is already done. The prices on retro games aren't going to suddenly plummet because Wata and Heritage Auctions are hit with class action suits.
It's about time.
This one is a no-brainer. This obviously happened. It's sad because it used to be possible to find sealed copies of good retro games available at reachable prices. Now they're just about gone forever.
Surprised it's taken this long.
Hoping this effects those guys at carboots!
"But it sold for 1.4million at auction..."
Sick of hearing it!
Money money money that's all they care about. Being a retro gamer is probably one of the most expensive hobbies there is now.
❗️Just decided to copy-and-paste this link and send it to a few E-Bayers... 😊
Removed - unconstructive feedback
I'm shocked. And on the surface, it all looked legit.
It's about time, and Karl Jobst deserves a Pulitzer Prize for exposing this nonsense. I'm hoping this gets through to the non-games media as well and maybe they'll think twice about publishing copy-paste articles about how X game sold for Y amount complete with soundbites from WATA/Heritage.
It will take a while, but hopefully the speculators will move on to something else. Vintage Walkers Tazos maybe. Anyone want to buy a whole folder full? You there, the berk with the deep pockets!
Oh no, WATA they gonna do?
So were they holding onto copies to be graded to create an artificial 'rareness' of graded copies in circulation?
I'm interested in the money laundering angle. Can you pay for a million dollar video game in cash?
Been following this and related topics for some time. Wish something would have happened sooner but at least we are here now.
I don't think I'll be able to justify the price of a CIB retro game anymore, especially the titles that are in the news like Super Mario on NES, I just wanted a CIB copy mind you, not sealed.
Lots of crappy stuff. Dude from Heritage listing his graded collectibles up for auction, with no intent to sell, just to keep pumping up the value, what a jerk.
YES! I hope they get what's coming to them. They've ruined the retro gaming market by driving prices up to an unreasonable degree so im glad that this might end up with a positive outcome.
@TryToBeHopeful if it helps and to story your interest in the subject, I'll sell you any of my games for a million dollars in cash! 😂
Finally, some good procreating news.
@DrewBA77 Only a fool asks to keep politics out of XY.
Good — I hope they get eaten alive - scum sucking charlatans of the lowest order.
I've never understood grading a brand new sealed game.
A used game sure, you need to know what condition it is in but a sealed game?
If it is a sealed game then it is new, unless of course it is one of those dodgy resealed games that people try and pass off as the manufacturers seal but you can easily tell it is not.
I own a fair amount of sealed games for Cube and Wii U.
I have a sealed copy of Ikaruga and Odama big box for Cube that I bought digital or other copies elsewhere, I don't need someone to grade it for me to know that they are new as I still have the receipts.
I'm not risking them getting damaged in the mail as I send it off for grading .
They're new and sealed.
Grade A for Awesome.
Done.
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