Recent record breaking sales of vintage games may have been a scam 4 years in the making.
The retro video game market has been seeing historic hikes in prices for the past several years, most notably during the COVID pandemic as outlined in my previous piece. Greater interest in the hobby and a slowly dwindling supply are two factors that will naturally lead to higher prices, but many recent headline grabbing auctions of WATA graded, sealed video games have shocked collectors. Who is paying millions of dollars for a retro video game that will never be played? And more importantly how did we find ourselves in such a position? Australian YouTuber Karl Jobst poses a sound theory on how two trusted institutions have been manipulating the retro video game market to rake in millions of dollars.
In the above video exposé Jobst outlines several intriguing details about WATA Games, a video game grading company founded in 2017 by Deniz Kahn and Mark Haspel, and Heritage Auctions, a private auction house founded in 1976 by Jim Halperin. On the surface their business arrangement makes sense. You have a group of retro video game experts that authenticate and grade a product that a trusted auction house will then sell to private collectors. The collectors know they’re getting a “certified” product and thus bids go sky high.
However, there are hints that Heritage Auctions had a hand in the formation of WATA Games in order to use them as a tool to overvalue items in order to increase commissions. WATA Games receives 10% of the appraised value of a game as their commission for their services and Heritage Auctions takes 20% off the top of all final auction prices. Add to the mix Just Press Play, an online retro video game marketplace founded by Zac Gieg, that was one of the first to promote and sell WATA graded games and its easy to see the potential for collusion. Furthermore, there appears to be a connection between WATA Games and Rally, an alternative asset investment group that specializes in collectibles including retro games, by tracing back to a Pawn Stars appearance by Deniz Kahn and a certain WATA-graded Mike Tyson’s Punch-Out!! for NES.
The most damning piece of evidence comes from the first major headline back in 2019 when a WATA graded Super Mario Bros. for NES sold at auction for over $100k. Who bought the game, you ask? None other than Jim Halperin and Zac Gieg. Since then the buyers for record breaking auctions have been kept a secret for privacy protection, but you can’t help but wonder how many of these benchmark sales were nothing more than market speculation by the very institutions that represented them.
The honest truth may not be so sinister, but its hard not to see the tangled web of intrigue forming after watching Jobst’s video. Ultimately, a collectible’s value is always subjective. If you as a seller value it at a certain price and find a buyer willing to pay that price then the two parties can shake hands and both walk away pleased. Personally, I don’t own and never will own any graded games and I would just as soon leave the “experts” at WATA out of my collecting business.
What’s your take? Leave a comment! Until next time, geeks!