25 Aug 2021 4:26 PM +00:00

Auction And Grading Companies Face "Fraud" Allegations Over High Retro Game Prices

You may recall that several weeks ago, Super Mario Bros. set a new record by selling for $2 million at auction. Following increasing highly sales for Between Pokémon cards setting auction records, a NES copy of The Legend Of Zelda and more, eyebrows were quickly raised.

Releasing a 52-minute video yesterday, journalist Karl Jobst alleged that two companies - grading company Wata Games and auction company Heritage Auctions - were complicit in artificially inflating prices across the retro game market.

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Auction And Grading Companies Face Fraud Allegations Over High Retro Game Prices

Having set up in 2018, Wata's often considered an authority in video game grading, providing collectors a numerical grade depending on their quality. Having sold a separate Super Mario Bros. copy for $100k in 2018 - the record previously being $30k - that was bought by three people, including Heritage co-founder Jim Halperin.

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From that point onwards, Jobst begins highlighting other irregularities, Wata's pricing model for grading (dependent on market value at that time) and Heritage Auctions' 20% buyer premium, believing they're worked together to artifically increase each other's profits. For retro fans out there, it's worth looking into Jobst's extensive report

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Update No.1 - August 25th, 11:55am (BST)

Since publishing this piece initially, Heritage Auctions has released this statement:

Heritage Auctions wishes it had been given the opportunity to respond before the video’s publication, because there are numerous misstatements of fact and inaccurate conclusions contained within the piece. Heritage strongly refutes any allegation that it or its officers are involved in shill bidding, “market manipulation” or any similarly illegal or unethical practices.
Heritage prides itself on our transparency and being a place built by and for collectors. With this in mind, we welcome the opportunity to discuss the video-game marketplace further, and would invite Mr. Jobst to our world headquarters in Dallas to tour our operations and speak further with leadership.

Update No.2 - August 25th, 17:25pm (BST)

Wata Games has now contacted me to issue their own statement, too:

Wata Games is the trusted leader in collectible video game grading and we're honored to play a key role in this booming industry that we are incredibly passionate about. We're humbled by the support of our thousands of customers who trust us to provide accurate and transparent grading. The claims in this video are completely baseless and defamatory and it is unfortunate that Mr. Jobst did not contact us to give us the opportunity to correct him.

Source: VGC