Exposing fraud and deception in the retro video game market

[+GoldenWheels]

I tacked this video on to one of the threads regarding one of the Super Mario Bros sales, but I think it deserves its own thread. Almost an hour, but Karl does very detailed work. Totally worth the watch for sure if...if you are even here seeing this thread on a video game forum....or if you "collect" at all.

 

Not news to many of us, but video games are being taken the way of coins, comics books, and baseball cards. Sometimes by the same people/companies...that to me is the very interesting part here.

 

 

 

[youxia]

This guy has some serious balls, telling it like it is, because the players and money involved are quite big. And yes, it's nice for few of us haters to hear a somber validation of our mumblings, and see the dots being elegantly connected in a relentless blow by blow fashion.

 

And shame on the so-called journalists from the gaming press and "serious" outlets such as BBC, who not only have never picked on this rather obvious sham, but were always happy to oblige the speculectors and giddily report the latest "record-breaking" sale.

[Steven Pendleton]

I and some of the others here have suspected this is a scam for some time. The scammers can go to hell and take those that support them along. At least they haven't turned their attention to truly rare games like the ones on the Neo Geo AES yet, but I imagine they will eventually and then AES will become literally impossible to collect for unless you just happen to find games at a garage sale for $5 or something.

 

Thankfully, most of the truly rare AES games are in the possession of people who know exactly what those games are and understand what they have and don't part with their games very easily.

Edited August 24, 2021 by Steven Pendleton

[DavidD]

Are you telling me that there is something suspect about the fact that "grading company" and auction house having some many connections?

 

I've been suspicious about all these 'record high sales' coming from a single auction site over the past two years.  Everything about it screams "artificially inflating the market."

 

Perhaps the essence of this hour video could be distilled into a few paragraphs and posted as a news article somewhere.

[DavidD]

It appears that one Seth Abramson has posted an article about all sorts of issues with WATA and Heritage. A large part of what he points out is that WATA isn't disclosing how MANY copies they've graded versus how many have been sold -- and that there is clear evidence there is a "flood" of CIB Super Mario Bros. 3 waiting to hit the market, which will necessarily drop the prices.

 

Nintendolife's article on Abramson - https://www.nintendolife.com/news/2021/08/hidden_sales_data_of_graded_nes_games_released_to_combat_artificial_inflation_and_record-breaking_auctions

Abramson's own article - https://sethabramson.substack.com/p/the-first-preliminary-population

 

 

 

[NinjaWarrior]

Jeff Meyer was the one that shut NintendoAge down

 

We need to stop Grading Games

[Lostdragon]

11 hours ago, youxia said:

This guy has some serious balls, telling it like it is, because the players and money involved are quite big. And yes, it's nice for few of us haters to hear a somber validation of our mumblings, and see the dots being elegantly connected in a relentless blow by blow fashion.

 

And shame on the so-called journalists from the gaming press and "serious" outlets such as BBC, who not only have never picked on this rather obvious sham, but were always happy to oblige the speculectors and giddily report the latest "record-breaking" sale.

From personal experience with the BBC when they wanted help researching Jane Whittaker... 

 

The reporter initially seemed genuine enough, wanted to chat, share stories and what had been found and who'd come forward. 

 

I put her into contact with those who only wanted to discuss jane over the phone or via P. R agents. 

 

But it soon degenerated into said reporter saying I should run all my research findings through her first and not make anything public until I had her approval, this at a time her producer hadn't even green lit the proposed exposure program. 

 

She was told where to go and nothing ever came of the BBC investigation. 

 

They are an absolute disgrace wanting the little people to put all the work in, promise to blow deception wide open and then nothing. 

[Mikebloke]

55 minutes ago, Lostdragon said:

From personal experience with the BBC when they wanted help researching Jane Whittaker... 

 

The reporter initially seemed genuine enough, wanted to chat, share stories and what had been found and who'd come forward. 

 

I put her into contact with those who only wanted to discuss jane over the phone or via P. R agents. 

 

But it soon degenerated into said reporter saying I should run all my research findings through her first and not make anything public until I had her approval, this at a time her producer hadn't even green lit the proposed exposure program. 

 

She was told where to go and nothing ever came of the BBC investigation. 

 

They are an absolute disgrace wanting the little people to put all the work in, promise to blow deception wide open and then nothing. 

Yes, even orgs like the BBC will only bother taking what you have to say if it fits their narrative. Been on that end of the stick myself.

 

I watched the whole video, a lot of it I knew already. The links to the 90s coin bubble was what got me though, they've literally as an individual been fined for doing this before.

 

Its definitely hurt my love of collecting this grading business, and speculations of what is assumed values. I know there is other users here who are now dropping out the game due to this immoral activity and it certainly makes me think about it too. I'll probably stay in it as long as I can feel comfortable paying the price for games I want. Thankfully my main console collections is outside the overhyped Nintendo regulars such as NES and SNES. 

[Lostdragon]

1 hour ago, Mikebloke said:

Yes, even orgs like the BBC will only bother taking what you have to say if it fits their narrative. Been on that end of the stick myself.

 

 

It was the sheer arrogance of the reporter that got to me.. 

 

So basically you were going to do a show focused celebrating Jane and his career on the games industry until your researchers discovered exactly what we have been saying, Jane's LIED about 85% of it.. 

 

Jane refused you access to key people close to him, as he knew he'd been rumbled, you'd seen the work we were doing and smelt a story. 

 

I'm all for sharing of resources and people from Rebellion, Bullfrog who weren't comfortable talking to unknowns like myself, might well of been happier talking with the BBC, if they felt such a nationwide show would achieve results. 

 

But to turn around and dictate I pass on everything to the BBC and that they were to receive exclusively anything still to come in... 

 

When she admitted the program hadn't even been approved by her bosses... 

 

 

Jog on love... 

 

 

Sorry to hear you've had similar.. 

Edited August 24, 2021 by Lostdragon

[+GoldenWheels]

4 hours ago, DavidD said:

It appears that one Seth Abramson has posted an article about all sorts of issues with WATA and Heritage. A large part of what he points out is that WATA isn't disclosing how MANY copies they've graded versus how many have been sold -- and that there is clear evidence there is a "flood" of CIB Super Mario Bros. 3 waiting to hit the market, which will necessarily drop the prices.

 

Nintendolife's article on Abramson - https://www.nintendolife.com/news/2021/08/hidden_sales_data_of_graded_nes_games_released_to_combat_artificial_inflation_and_record-breaking_auctions

Abramson's own article - https://sethabramson.substack.com/p/the-first-preliminary-population

 

 

 

That was an interesting thing I learned from the video, and one I hadn't understood or knew was what an above board company would do....release "population reports" to show a true (or truest you can have anyway) picture of what the market is actually like.

[Tempest]

I always assumed stuff like this was for money laundering.  

[youxia]

7 hours ago, Lostdragon said:

From personal experience with the BBC when they wanted help researching Jane Whittaker...

Of course, I was also thinking about JW when considering this clusterf**k and the media not being much interested. But even outrageous as Jane's case is, this is even bigger, since it actually directly affects the entire hobby, countless people, and there are really big sums swirling around.

 

It's simply astonishing that all these huge serious-news outlets just blindly parrot whatever these few bozos feed them, without any notion of questioning the incredibly shady narrative. I mean, I don't even know this market that well, since I'm a microcomputer nerd, but it is just so damn obvious. That guy Karl dug up some neat stuff, eg the coin bubble link being quite amazing, but most of the base facts about the highly suspicious collusion are available in the news items and not particularly hidden.

 

Same goes for the "progressive" gaming outlets such as Kotaku or Polygon, who are usually first to jump on any trendy outrage, but here only went as far as mentioning "suspicious" or "eyebrow raising" things, usually quoting others, and never bothering to have a closer look themselves.

EDIT: just saw this incredible article on Ars Technica. Above I complained about Kotaku/Polygon pieces, but they at least did includes some mentions of the possibility of foul play. Meanwhile, AT tries to rationalize it all away, so much it made my head hurt, and proposes the big idea of "Old guard vs New Money" and that "it's all about the sealed games, stupid!". The article is full of quotes from WATA, Heritage and some others who nod sagely and agree, and basically paints the naysaysers as some out-of-touch old timers. Here's a sample:

 

Quote

"As a long-time collector, there seems to be this divide where people hate the people who are grading games, saying it's ruining the hobby and stuff," Seattle Retro Game Expo Vice President Rob Schmuck said. "I think it's really this fear of being priced out. Pokémon games are a great example. There's somebody locally who's disparaging the price of Pokémon games. Well, you picked probably one of the most popular franchises right now, thanks to the card game having this resurgence and people really going in that... So I think it's a bit ironic to complain about that when you're the reason that the price is climbing."

So, there you have it. It's not only all our fault, we're just being jealous to boot. Thank you, Mr. Schmuck

Edited August 24, 2021 by youxia

[Mikebloke]

4 hours ago, Tempest said:

I always assumed stuff like this was for money laundering.  

I think that's turned into the go-to Youtube comment when Wata and Heritage is mentioned. In truth, directors of these companies hyper inflating valuations by "buying" it themselves and not declaring it is not money laundering in itself as long as they are continuing to pay taxes as required, but opens up the doors if people realise it might be an easy way of moving money around.

 

I don't know how taxation on goods work in the US, if this was the UK, VAT tax is imposed at the point of monetary transaction - such as when you pay on eBay, $1,000,000 would equate in most cases to a $200,000 VAT bill, of which businesses would normally push on the buyer. Therefore a $1,000,000 purchase would cost you $1,200,000 (plus any additional fees and delivery) - however, do these sales finalise with exchange of money? Should the public purse be getting a lot of money from these transactions but missing out?

 

If at any point the sale of the item (in the first, second, final or any instance); in countries the money, goods or service provider (such as the auction house) have transited avoids local laws on taxation, then its tax avoidance. If its money derived from the proceeds of crime, then its money laundering. In some places, that might be considered one and the same crime.

[TheGameCollector]

It's still an unethical practice akin to shill bidding on ebay to make your own item sell for more. If they pay a few taxes their friend who is in the loop and in possession of a copy can try to make a huge profit thanks to their boost. If only a buyer will fall for their price trick.

[Austin]

I had always begrudgingly ignored sealed game shenanigans. As someone that wasn't familiar with the comic, card and coin booms and busts, this video was extremely eye-opening.

[Tanooki]

Good to see this debate picking up here too, the more it spreads the better.

 

To think that one of the people perpetuating this did it before.  One of the owners in this racket was busted in the 1980s for the same exact fraud tactics and was fined (in then money value) 1.2 million dollars for wreaking havoc on the collectible coin market.  Now he's back with HA and WATA on both, doing the same crap to prop up fake prices, not share reports of what stuff is truly worth or how many have sold to back this up.  They hide these sales even if you have a HA or wata account, they won't display the past sales, no record that stands like ebay metrics can be pulled such as VGPC and their like track.

 

People used to and still do cry laundering, and it's probably fair, for some of the end buyers who fell into this crap, but the core rot of it, is fraud, the collectibles version of insider trading the SEC would ruin someone over with stocks.

[PikoInteractive]

Steve Cohen from Point72 is one of the owners of Collectors Universe. Which has been caught doing the same with art. Just saying.

 

A

[Keatah]

All this exemplifies why I do emulation!

..and why I call these "collectors" what I call them.

 

 

 

 

 

Psst.. I really didn't need make a post here, but, I was too lazy to scroll up and click on the [Follow] button. By making a post I get auto-follow. And the deed is done.

[8th lutz]

I am not into boxed game collecting, but I am happy the whole thing is being revealed now. I hope the bubble busts now and correct the inflated prices caused by those shady people. I hope Wata Games and Heritage get close down. Those people ruin the hobby of video games.

 

It bothered with the cost of games that are loose in terms of cost. Boxed boxes affects the loose copies of game prices. I thought something was off with the cost of games like Mario 64 and this video proved my concern was correct. When that video revealed the buyers aren't real video game collectors at all causing these prices, it irked me very much.

 

I like to get physical games and I've been this way since the 1980s. In time, I got systems that I did not have growing up such as the Sega CD. What Wata games and Heritage is doing is not helping me at all by causing the prices to increase due to their actions.

 

I hope Midwest Gaming Classic is going to do something to Wata games. Wata Games is listed as one of the Vendors at the November Midwest gaming Classic event that happens from November 5th to November 7th. 

 

Hopefully the organizers decides to not allow the Wata Games in or prevent people from that booth from buying games at the event from other venders.

 

 

[+jeremiahjt]

3 hours ago, Keatah said:

All this exemplifies why I do emulation!

..and why I call these "collectors" what I call them.

 

 

 

 

 

Psst.. I really didn't need make a post here, but, I was too lazy to scroll up and click on the [Follow] button. By making a post I get auto-follow. And the deed is done.

I call bs. You just saw it as a chance to talk more about emulation.

[DavidD]

As an extreme aside, I am happy to know that my early suspicions were correct.  Back in February 2019, Heritage Auctions issued a press release about the "record sale" of a sealed copy of Super Mario Bros.  When I read the press release, I noticed that the buyer was an owner of Heritage Auctions, and that the press release made a big deal about WATA games.  It seemed suspiciously circular... so hey, maybe I was the first person to cast doubt on it when reporting! Heh.

 

https://themushroomkingdom.net/blog/15066

Quote

$100,150 for Super Mario Bros.? 01:34:10 AM CT [David]

A "sticker sealed" copy of Super Mario Bros. was recently purchased by a group of collectors.  These copies are said to have been sold during the early NES test launches in New York and Los Angeles, and are sealed with a sticker instead of shrink wrap.  The title was certified as authentic and graded by Wata Games, a company specializing in grading retro video games.

What's a bit odd about this is that it seems like a bit of circular publicity.  You see, this sale was announced by a press release from Heritage Auctions, an auction house that auctions off retro video games.  One of the buyers of the game is the co-founder of Heritage Auctions.  Heritage Auctions makes a point of selling games that have been certified by Wata Games.

It's almost like this is a publicity stunt to get collectors excited about buying certified collector's items from Heritage Auctions.

(Wata Games does have some neat articles about obscure game releases though -- like this page about black box NES variants!)

I kind of wish I had thought to investigate a bit more, but it just seemed like a silly fluff PR bit intended to spur interest in their weird auction site...

Edited August 25, 2021 by DavidD

[Keatah]

None of this surprises me. Always knew WATA was fullashit. Even said so many moons ago.

 

What does surprise me, just a bit, is that some other "company", read that as another scammer, sells shares in certain videogames. And when it sells at auction, if it sells at auction, you get a percentage of the final sale.

 

All these various ways of "trading" videogames that've cropped up in the past decade continue to lead me to believe that there is no (or minimal) intrinsic value in the games themselves. They're just vessels to float your money over to someone that's smarter than you.

Edited August 25, 2021 by Keatah

[Mikebloke]

I have wondered if the latest 2 million game which is another SMB1 (I noticed it hasn't picked up as much traction as the SM64 story) is all a cover up con when it was noticed that SM64 is neither rare, nor expensive, nor uncommon in the state and condition the game sold in. There were a lot of eyebrows how something you could fetch on ebay for 3 figures went at auction for 7 figures. By bringing it back to SMB1 the alure of a "special" limited edition print becomes justifyable compared to a very common game in respect of SM64 while at the same time making out that a common sealed game is still relative to a rare sealed game. 

[Keatah]

So. It's pretty much like I said before. These games are trading at a high price because someone says so. And there's these weird mixes of flunkies and manipulators to make the wheels spin.

 

IMHO the nostalgic value will always exceed the true, real, monetary worth. I mean most of this shit is 30-year-old bits of plastic spit outta a production line. Most of it decaying crap. The only timeless things are the "game program" and backdrop story of the game and memories it created when we enjoyed the stuff as kids. When it was new.

 

It's quite amusing how some "collectors" claim to be those "collectors", and have only been in the scheme for 2 years. Hahahhaha I just fuck'n love it! MOAR please!

 

8 hours ago, 8th lutz said:

I like to get physical games and I've been this way since the 1980s. In time, I got systems that I did not have growing up such as the Sega CD. What Wata games and Heritage is doing is not helping me at all by causing the prices to increase due to their actions.

True enough. And astute price watchers (just on ebay alone) can see the halo effect causing high prices to spread to classic computer software and peripherals and manuals.

 

8 hours ago, 8th lutz said:

es is listed as one of the Vendors at the November Midwest gaming Classic event that happens from November 5th to November 7th. 

 

Hopefully the organizers decides to not allow the Wata Games in or prevent people from that booth from buying games at the event from other venders.

Not sure they're gonna have the gumption to do anything at all. If they do I'll be pleasantly surprised. And, besides, how could MGC organizers prevent a WATA spot/agent from buying?

Edited August 25, 2021 by Keatah

[youxia]

9 hours ago, 8th lutz said:

Hopefully the organizers decides to not allow the Wata Games in or prevent people from that booth from buying games at the event from other venders.

Ain't nothing gonna happen. The truth is, many people, both punters and from within the industry, are liking the look of all this crazy money and hoping they can somehow get into that game and get a slice as well. I bet all of us thought at least once "wouldn't it be nice to score that ultra rare game for a fiver and flip it for thousands" (now hundreds of, or even millions). Problem is, many folk take these thoughts seriously. That's how all these schemes work: even though they were exposed so many times and everybody sort of knows the score, people still get lured in. And when the likes of WaPo, BBC, and Rolling Stone also get starstruck, no wonder that many normal folks falls for it as well.

 

Others yet think that super expensive items make gaming mroe serious and respectable, what with games being now sold in auction houses for art-level prices.