Wata Games and Heritage Auctions co-founder Jim Halperin has now become the focus of a class-action lawsuit claiming that they’ve manipulated the retro games market for personal gain. The filing was made in California by clients that previously employed Wata for its grading services and alleges that Wata has been artificially inflating the prices of retro video games and failing to disclose that Halperin also sits on its board of directors.
The company is now accused 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.”
At the core of the allegations is Wata’s practice of charging customers a higher percentage for grading depending on the game’s market value, meaning it’ll make more money if the market price increases. Back in 2019, the company graded an NES copy of Super Mario Bros. which subsequently sold for a record-breaking $100,150 USD despite a similar copy selling two years earlier for just about $30,000 USD. As it turns out, one of the three buyers was Halperin, a fact Wata failed to disclose.
In an episode of Pawn Stars later that same year, another one of the three buyers by the name of Richard Lecce took the same copy and tried to sell it for a staggering $1 million USD. Astonished, the show’s host Rick Harrison consulted Wata CEO Deniz Khan, who valued the game at $300,000 USD, almost three times the price Halperin and his associates purchased the game for just a few months prior. Of course, neither Khan nor Lecce disclosed their relationship, and while “no deal to purchase the game was made by the pawnshop,” the plaintiffs argue that “the visibility and alleged value of the game had been successfully inflated to the public.”
It also turns out that between 2019 and the close of 2021, retro games graded by Wata and subsequently sold through Heritage Auctions broke pricing records six consecutive times. Following the $100,150 USD sale of Super Mario Bros. another copy was sold for $114,000 USD in July 2020, which was dethroned by a copy of Super Mario Bros. 3 in November 2020 for $156,000 USD. In April the year after, Super Mario Bros. once again sold for $660,000 USD, followed by The Legend of Zelda in July 2021 for $870,000 USD and Super Mario 64 for $1.56 million that very same month. The current world record is at $2 million for Super Mario Bros., and it also happens to be graded by Wata.
Elsewhere in the gaming industry, 343 Industries’ Joseph Staten has teased the return of classic Halo maps in Halo Infinite.