WATA Game Grading Sued For Price Manipulation 6 6

[Tnexus]

On 7/19/2022 at 6:25 PM, atomised said:

The problem with Jobst is that he has been accused of white supremacy and racism.  Simply google his name and racism and you'll find the threads.  Yes he denies it and nothing seems to be substantiated but that's not something you want to have your name associated with.  If you look at his original video on Wata, it's clearly a hit piece from someone that has a problem with capitalism and American entrepreneurs.  His heavily biased socialism views are all over that video and he clearly enjoys a teardown of an american entrepreneur, in this case the founders of Wata and Heritage.

Let's just ignore the fact that there's enough potential evidence for someone to create a class action lawsuit against two giant companies, but sure, let's blame socialism...

Edited July 20, 2022 by Tnexus

[Domo Arigato]

On 7/20/2022 at 12:18 AM, Tnexus said:

Let's just ignore the fact that there's enough potential evidence for someone to create a class action lawsuit against two giant companies, but sure, let's blame socialism...

And just how much "potential evidence" is required to create a class action lawsuit? 

 

[godzilla43]

Well that is sad if there is some truth to that but this is about WATA and graded video games market and not about racism.
The Jobst video was good that it brought questions about WATA and Heritage to surface. Like that 2 million SMB 
was way cheaper before WATA. Then couple Heritage auctions and the price tenfolds every time.

Heritage/WATA/high end dealers figured out that this could be something they could push to rich eccentric people who can give them a blank check.

The otherside of the coin there is also people who might have different agendas to attack WATA/Heritage like hardcore NES collectors who are salty that their
loose/not sealed CIB games are not those games that are selling for lot nowadays. 

Also the game collector scene is different from lets say VHS collectors. Many game collectors play their games and are pissed off that
suddenly after WATA game prices have suddenly risen a lot. If a VHS tape for Star Wars sells for a lot who cares because you can just go to Disney+
and watch much better version of it or buy a 4K UHD-disc. VHS tape of SW is not the original film reel. Other example some comic book collectors like to send their comics for grading and others don't but no one is actually reading those valuable comics so a graded comic book does not offend anyone like a non sealed video game that is graded and off from gamer's hands.

Edited July 20, 2022 by godzilla43

[Bronty]

People who whine about that side of it are often if not always motivated solely by prices passing them by.    They present this tortured argument that they are real collectors because of x,y,z so they should be entitled to a price they can afford.    Its just saltiness.    Comic collectors have had a good 40 years to get used to the fact that some books are just out of reach.    That’s a relatively  new thing for people in newer hobbies to deal with. 

Edited July 20, 2022 by Bronty

[Dr. Balls]

On 7/20/2022 at 7:33 AM, Bronty said:

People who whine about that side of it are often if not always motivated solely by prices passing them by.    They present this tortured argument that they are real collectors because of x,y,z so they should be entitled to a price they can afford.    Its just saltiness.    Comic collectors have had a good 40 years to get used to the fact that some books are just out of reach.    That’s a relatively  new thing for people in newer hobbies to deal with. 

I can see that mentality for a lot of people. God help the record collecting community if someone grades records (totally unrealistic, imho) - because a lot of people in that group can get bent simply because records of any grade skyrocket in value for no discernible reason.

[Motor City Rob]

On 7/20/2022 at 1:18 AM, Tnexus said:

Let's just ignore the fact that there's enough potential evidence for someone to create a class action lawsuit against two giant companies, but sure, let's blame socialism...

 

On 7/20/2022 at 1:25 AM, Domo Arigato said:

And just how much "potential evidence" is required to create a class action lawsuit? 

 

My thoughts exactly.

I had to read the first comment a couple times. 

[atomised]

On 7/19/2022 at 10:18 PM, Tnexus said:

Let's just ignore the fact that there's enough potential evidence for someone to create a class action lawsuit against two giant companies, but sure, let's blame socialism...

Looks like Pat the NES punk has his fan base in here

[sfcityduck]

Allegations in the class action lawsuit include that:

Quote

 

Wata was started in 2018 but rose to prominence when Heritage Auctions promoted its first Wata-certified video game auction: a pristine copy of Super Mario Bros for the NES, which sold for $100,150 in February 2019. It's alleged this was sold to three men, one of which was Heritage Auctions' own co-founder Jim Halperin, who is also listed as an advisor on Wata's website, although the suit claims this conflict of interest was never disclosed.

...

Prior to this sale, the highest price ever paid for a video game was another copy of Super Mario Bros, which sold for just over $30,000 on eBay in July 2017. Since Wata and Heritage Auctions have been promoting their work, a copy of Super Mario Bros has been sold for $2 million, while a copy of Super Mario 64 went for $1.56 million -- both graded by Wata.

Wata takes a small percentage of the game's market value when graded; for example, if a game is valued at $1 million, Wata will charge $20,000. Heritage Auctions also takes a cut: 20% of the buyer's premium, as well as 5% from the seller.

The class action lawsuit accuses Wata and Heritage Auctions of inflating prices, pointing to their various promotional efforts and media interviews, often with the message that retro game prices are likely to increase.

One example in the lawsuit was an episode of History Channel's Pawn Stars, which showed Richard Lecce -- another part-owner of the $100,000 Mario game -- trying to sell it for $1 million at a pawn shop. In the episode, the pawn shop brought in an expert to value the game: Wata CEO Deniz Khan. The suit claims that Lecce and Khan "failed to identify any kind of relationship to one another" and "appeared to pretend they did not know each other." The episode has apparently been removed from the History Channel website "without explanation."

 

[Lazyboy]

On 7/20/2022 at 8:33 AM, Bronty said:

People who whine about that side of it are often if not always motivated solely by prices passing them by.    They present this tortured argument that they are real collectors because of x,y,z so they should be entitled to a price they can afford.    Its just saltiness.    Comic collectors have had a good 40 years to get used to the fact that some books are just out of reach.    That’s a relatively  new thing for people in newer hobbies to deal with. 

Give me a break. The rampant, obvious manipulation in nearly every hobby (not to mention other places) right now is disgusting. Money corrupts everything.

[Bronty]

On 7/20/2022 at 4:54 PM, atomised said:

Looks like Pat the NES punk has his fan base in here

Rofl

[Jimmy Linguini]

This is all fine and good but why has my copy of 50 cent blood on the sand sat in "Grading" for the last two weeks?

Come on and ship that thing WATA! What the heck!

[godzilla43]

 

[Dr. Balls]

Video game sells for $250,000 last year, same game with same serial number resells this year for $38,000. It goes on and on. The owner had other games stored in Heritage's vault while waiting to flip for a profit - but that never came, that owner lost hundreds of thousands of dollars. Not to mention the guy who bought a Sonic game for $312,000 in 2021 and in 2022 another one sells for $38,000.

All the while Heritage gets to double-dip on Buyer's Premium on these, and there's never a whisper uttered by anyone who posted a loss. Lots of sketchy stuff here.

Edited November 8, 2023 by Dr. Balls

[MatterEaterLad]

On 11/8/2023 at 6:31 AM, Dr. Balls said:

Video game sells for $250,000 last year, same game with same serial number resells this year for $38,000. It goes on and on. The owner had other games stored in Heritage's vault while waiting to flip for a profit - but that never came, that owner lost hundreds of thousands of dollars. Not to mention the guy who bought a Sonic game for $312,000 in 2021 and in 2022 another one sells for $38,000.

All the while Heritage gets to double-dip on Buyer's Premium on these, and there's never a whisper uttered by anyone who posted a loss. Lots of sketchy stuff here.

It's such a scam. 

I've said it before, will keep saying it -- it's a total conflict of interest for a grading company to have the same ownership (or board members) as the auction house. You factor in Halperin's lifelong history of fraud and criminality, Heritage employees (and owners) free to shill their own collectibles on their own site, and it's all the tools you need to manipulate the market. 

[godzilla43]

On 11/8/2023 at 3:31 PM, Dr. Balls said:

Video game sells for $250,000 last year, same game with same serial number resells this year for $38,000. It goes on and on. The owner had other games stored in Heritage's vault while waiting to flip for a profit - but that never came, that owner lost hundreds of thousands of dollars. Not to mention the guy who bought a Sonic game for $312,000 in 2021 and in 2022 another one sells for $38,000.

All the while Heritage gets to double-dip on Buyer's Premium on these, and there's never a whisper uttered by anyone who posted a loss. Lots of sketchy stuff here.

Good recap. I was too lazy to write anything. In many forums there is a rule that if you post a video you should also write a recap what the video is about.

[darkstar]

On 11/8/2023 at 7:31 AM, Dr. Balls said:

Video game sells for $250,000 last year, same game with same serial number resells this year for $38,000. It goes on and on. The owner had other games stored in Heritage's vault while waiting to flip for a profit - but that never came, that owner lost hundreds of thousands of dollars. Not to mention the guy who bought a Sonic game for $312,000 in 2021 and in 2022 another one sells for $38,000.

All the while Heritage gets to double-dip on Buyer's Premium on these, and there's never a whisper uttered by anyone who posted a loss. Lots of sketchy stuff here.

The sketchiness started when Heritage issued their initial press release years ago for the original Super Mario Bros sale that kicked this whole thing off. They made it read like the game sold in an open auction, except it didn't as it was a private sale. Nor did they mention that Halperin himself was one of the three buyers who collectively purchased the game. It was just one big scam from the beginning to hype their exclusive partnership with WATA as a new profit stream for their auction house.

Games had been getting graded for years and the only people that ever cared were video game nerds. It's why video game pricing on Heritage and other auction houses has never aligned with eBay, Heritage listings were being gobbled up by outside money. The copy of Sonic that sold for 430k on Goldin was laughable, it was pathetically over-graded with a giant tear in the wrap, of course it was bought by some crypto NFT dudebro who has no knowledge of videogames. 

[Dr. Balls]

On 11/8/2023 at 8:32 AM, darkstar said:

it was bought by some crypto NFT dudebro who has no knowledge of videogames. 

So let me spin out a scenario here:

Guy buys $100,000 in Crypto in 2019

That crypto skyrockets to $20,000,000

Guy peels off $400k for a video game based on auction house hype.

He's one of few people in the world to pay stupid money for it because he's got tons of stupid money, and while it hurts the hobby by skewing values, it makes me wonder about what the real situation is for buyer or seller or auction house. Is the buyer just a Dudebro who wants to impress his friend by showing them a screencap of his $400K video game locked in a vault? Or is the buyer someone else?

From what I understand in my limited tax knowledge - If you "cash out" crypto and reinvest elsewhere, you still have to pay capital gains on those profits. The only benefit I can see in taking a 90% loss is that you're attempting to offset taxable income the following year for whatever reason by showing a gigantic loss.

Also, Crypto transactions are still viewed as "taxable events" by the IRS, meaning if you pay with Crypto to a business, they still have to claim it as income whether you cashed out or held it in a wallet. So if it was paid with Crypto, the auction house and seller still have to report it.

Is there something going on in the undercurrent of all this? On the surface it seems that:

Buyer who overpaid loses real money (despite how easily it was earned).

Seller makes a stupid amount of money, still taxable - but the insane profit is more than enough to cover the tax liability on $400k

Auction House double-dips and makes Buyer's Premium on both transactions (as well as Vault fees) - part of their normal operation.

It seems that two of the three people in this situation profit mightily at the expense of the third person. It'd sure be interesting to find out who owned these video games when they went up for auction and sold for insane amounts of money the first time around.

Edit: I know this is basically what's being discussed in the article, I was just ruminating on how it worked out.

Edited November 8, 2023 by Dr. Balls

[VintageComics]

On 7/20/2022 at 6:49 PM, Lazyboy said:

Give me a break. The rampant, obvious manipulation in nearly every hobby (not to mention other places) right now is disgusting. Money corrupts everything.

I agree, but more accurately, it's the love of money and not the money itself that causes corruption. Money is just a tool.

When profit is the single motivator everything will eventually fall apart because intent matters. It's not the business that causes trouble, but how people go about their business. So if you have someone in business who wants to make a profit but their intent is to do 'good things' like care about their employees or how their business affects others, you see that philosophy expand outward in a positive fashion.

But if profit is the only goal that philosophy expands outwards in similar fashion, but with destructive forces eventually. 

It's inevitable. 

 

[Dr. Balls]

On 11/8/2023 at 9:14 AM, VintageComics said:

So if you have someone in business who wants to make a profit but their intent is to do 'good things' like care about their employees or how their business affects others, you see that philosophy expand outward in a positive fashion.

It's nice to see that there are people out in the world that recognize the importance of this philosophy.

[MatterEaterLad]

On 11/8/2023 at 8:32 AM, darkstar said:

The sketchiness started when Heritage issued their initial press release years ago for the original Super Mario Bros sale that kicked this whole thing off. They made it read like the game sold in an open auction, except it didn't as it was a private sale. Nor did they mention that Halperin himself was one of the three buyers who collectively purchased the game. It was just one big scam from the beginning to hype their exclusive partnership with WATA as a new profit stream for their auction house.

PGX staff gets caught grading and selling their own collectibles = SCANDAL

Heritage ownership gets caught grading and selling their own collectibles = Business as usual.