Game grading firm Wata hit with lawsuit for “manipulating” retro market

Video game rating company Wata has been accused of “manipulating” the retro gaming market in a new class action lawsuit filed this week.

As reported by VGC yesterday (May 13), the Central District of California filed a lawsuit against Wata on May 10 of this week. The lawsuit is on behalf of all US residents who have purchased games from Wata, which is estimated to have over 10,000 people.

According to the lawsuit, Wata “engaged in affirmative acts to manipulate the retro video game market, engaged in unfair business practices, engaged in false advertising, made false statements about turnaround times for grading services and failed to disclose material delays to clients.”

This lawsuit follows an almost hour-long investigation posted on YouTube by Karl Jobst Last year. The report alleged that Wata and auction house Heritage Auctions worked together to artificially inflate the retro games market, which both companies categorically denied.

Wata and Heritage have also been accused of inflating prices in the lawsuit, as promotional materials from the two point to the retro gaming market and its prices are likely to rise.

Super Mario 64. Credit: Heritage Auctions

Wata and Heritage take a percentage of the market value of a ranked game, with an example given that a $1 million (about £820,000) rank will earn Wata $20,000 (about £16,000). Meanwhile, Heritage would accept reductions of around 20% of the premium from the buyer and 5% from the seller.

The plaintiffs in the lawsuit also allege that Wata promised to have the games appraised and returned within 15 working days, when the process actually took several months. Wata is also accused of having its employees sell their own classified games, which violates the company’s policies on fraud and conflicts of interest.

“The increased value of the games allowed Wata to charge even more for its grading services since the prices were tied to the values. Yet the relationship between Wata and Heritage Auctions was still unknown to collectors,” the lawsuit adds.

Last year Wata noted a sealed copy of Super Mario 64, which ended up selling for a record £1,124,000 (US$1,560,000). He then noted a sealed copy from 2011 Skyrimsold for £433.26 ($600).

In other news, Square Enix has said it wants to start new development studios, shortly after announcing it will be selling off most of its Western development arm.

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