Deniz Kahn is the founder of Wata Games. Wata Games launched in 2018 as primarily a video game grading and certification company, when video games were “not even on the map.”
A longtime collector since the age of 12, Deniz joined the Otis team for an Instagram Live conversation to share his expertise and discuss the legendary Nintendo World Championships cartridge in advance of its drop on Otis.
This conversation has been condensed and edited for clarity. Watch the full video on Otis’ Instagram.
Why is Nintendo World Championships considered one of the holy grails of video game collecting?
Historically, ever since I've been collecting—which is 15 years plus now—the NWC cartridges have always been a Holy Grail. They are a representation of a major, major competition event. Pepsi and Nabisco were involved as sponsors. They rented out a stadium for this competition. They made such a limited quantity of the cartridges, and they really were never supposed to get into the public’s hands. They were designed specifically for the competition. So you have that rarity aspect, and this awesome history behind it.
We don't know exactly how many cartridges are out there. The highest number that was ever found was 343. These have been documented over time. We’ve found about 80, maybe up to 90. It's assumed that the most that'll ever be found is 100 or so, and they’ve been found everywhere—from garage sales, to owners who actually got them.
A little bit about how they got out in circulation: Nintendo Power held a Nintendo World Championship contest, where they gave out the gold cartridges. Those are a separate beast on their own—they only made 26 of them. When they started getting distributed, the parents of the children who were on the championship tour were like, “Why are people getting these trophies that my kid deserves, since they've been touring?” So the event organizers agreed that the finalists got to keep a cartridge as a trophy. But, keep in mind, they were used in the competition. These were not kept pristine—they were played. Because of that, it's an anomaly to find one in high grade, let alone one in 8.5, like the one that Otis is dropping.
Just a brief history on the cartridge: It's a six minute and 21 second timer. You have to get 100 points on Super Mario Bros, then you gotta do the first level of Rad Racer, and then you get to Tetris—where you rack up all your points. There was a movie called The Wizard, and it's loosely based on the Nintendo World Championship. So, from a marketing perspective, this was a massive undertaking that Nintendo did, and this game is a good representation of that history. That's why collectors have coveted it for so long.
How many of these cartridges do you think you've seen?
I think we have graded roughly around 30 in maybe our entire lifespan. That might seem like a lot or a little depending on where you're coming from. You look at something like Action Comics #1, and they've graded roughly around 100 of those, and that's the most valuable comic book that's out there.
Not only that, they're all numbered, so every NWC cartridge is unique. It allows you to track the provenance, and it allows you to have something that isn't just a mass produced game, where condition is the only thing that differentiates it.
Could you walk us through how you might grade an NWC cartridge similar to ours? What particular features differ from other games?
When we grade an item, especially with cartridges, we're actually really harsh in our grading scale. People will send in what they think is a mint cartridge because the label looks so glossy, and they'll get in the sevens. We're looking at it under certain lights.
Whenever we're grading something, we grade it based on what the item is. So, we don't grade on an absolute scale. We will treat, for example, unlicensed NES games differently from licensed games, because the boxes are much poorer quality and they get damaged easier. It's the same exact thing with an NWC.
NWC’s are probably the most unique item that we grade, because the labels are handmade. They were glued with a different kind of glue than the mass production stuff that a lot of cartridges have. Almost all of them have something called glue mottling. The glue mottling, to someone who might not know what they're looking at, can look like damage. It’s this speckling where the glue is sort of eating through the label. You can have a dead mint cartridge, and it's still going to have glue mottling no matter what—so we don't actually consider that damage.
There's also a lot of NWC cartridges that will have label lifting, because the glue over time rots and causes the label to lift.
But, the number one thing that we see with most NWC cartridges is a significant amount of wear—wear along the ridges of the cartridge where it's been put into a system multiple times, and it's been used. When you have wear like that, you're automatically out of the nines, the eights. You're pretty much into the sevens and below. We've graded NWC's all the way down to a 4.0. We have a cartridge still at Wata where someone put it in a safe, and the safe had a fire retardant that ate all the plastic. It was dipped in acid.
An 8.5 is pretty much an unused cartridge. We've had CIB (“Complete In Box”) games that we can tell were factory fresh. No one played it. Maybe they opened the box once, and even cartridges that come out of those get 9.2 sometimes, so, just because you open a factory sealed game, that doesn't mean it's gonna be a 9.8, and so 8.5 is unheard of.
It really is unheard of. I mean, I personally remember looking at this and being like, “This is unused! How did this happen?” A little thing to add to the history of how these got out there—sometimes crew members who worked on the tour… one might have “fallen off the truck.” I would imagine this was something like that kind of scenario, where it wasn't used in the competition, someone got it, put it away, and it ended up at Wata 20 years later.
There is an 8.0 NWC right now at Heritage Auctions that is ending tomorrow. Could you explain the significance of the jump between between an 8.0 and an 8.5 like ours?
Yeah, it's much more significant for a couple of reasons. One, because we're talking about something where there are so few of them. Population skew is going to be a big difference from one point to the next.
The other thing is that you're not going to get 9.2, 9.4, 9.6, 9.8 of these cartridges. You have to think: where is this going to max out? Are NWCs really going to max out at 9.0? And if so, does an 8.5 make it pretty much the nicest that you can get? Then the jumps become a lot bigger. They're not as fine as a Mario game that we've graded 200 of, where 9.8 is the focus because that's attainable. It's not attainable on an NWC cartridge.
Are there any crazy stories or anything attached to this game that you've heard of within the collector community?
It’s mostly the fact that they've been found at garage sales, specifically with the gold cartridges. This is kind of a famous story—it was the first gold cartridge that we graded, and the owner bought it at a flea market. It might have detracted a little bit, but he still left it for grading—there's one of those little cheap dot stickers that has a two on it. He had taken it to the guy and asked, “Is this the price?” and the guy said, “I'm not taking effin’ anything less than that,” so he took out $2 and gave it to him!
There's a lot of cool stories like that. This guy Pat brought some to Pawn Stars many many years ago, and they offered him what would be a laughable amount today for both of them, but at the time was pretty close to market, so good for him that he turned that down.
Another one that comes to mind: someone was contacting all the finalists with a gold cartridge and one of them said, “Oh, no, mine got burned in a house fire and I lost it,” so some of these are just gone forever. Those are some interesting, often sad, stories attached to the game.
It’s funny to think about Pawn Stars—there were a lot of collectibles offered on that show that predated this whole collectibles boom. It's a crazy reminder to see how much growth this entire space has seen, particularly with grading authorities and major auction houses helping to legitimize these things as relevant, culturally valuable assets. That’s something that has changed everything.
Maybe we can talk a little bit about that, because Otis is all about culture, and there’s a lot going on here, specifically with the NWC right now.
Buyers now have confidence because of Wata—grade authentication, a standard—and the transparency from everything selling in the open market. There are still private sales, but for the big items, we're actually seeing price points now. It's allowing people to come in and spend more confidently, and so they're taking their other assets and divesting and investing them into things that resonate with them.
I've always talked about the driving factors for demand for video games, and bucketing them into “relevance relevance, rarity rarity.” A lot of people will get annoyed by hearing me say that so much. But, I say: its rarity, it’s condition rarity, and then it's relevance to video game history. All three of those are really what drove value historically. But now we have another, which is relevance to pop culture, and it’s the most predominant factor.
It's the reason that Mario games are selling for way more now. They used to sell for way less than the esoteric, rare stuff—like a Stadium Events cartridge—that someone like me, as a collector, cared about.
I think the really unique thing with the NWC, the thing that is propelling the value of it, is that there is now that third part. Yes, it's obviously relevant to video game history. But why is it relevant to pop culture? Well, because it's eSports. It's the genesis of eSports, and it's starting to be recognized as that.
So with that, now the cartridge has a whole other driving force behind it that's relevant to people who like gaming. They're buying it because it's a representation of culture—pop culture, American culture, whatever it is. I think that's something that's overlooked when people are saying, “Oh, it's just going up because the market’s going up.” It's going up because people are looking at it in a different light and valuing it for something different than what we historically value video games for.
It really is amazing to see how the culture gets to assign the value of something and play a role in the stuff that we care about.
That's exactly right. And it's not a formula either. At the end of the day with collectibles, so much of it is just emotion. You're going to see all sorts of anomalies that might not make sense. I think of it more like a Venn diagram. The NWC is definitely not going to be as culturally significant as Mario. But it's now moving towards that little section of the diagram, and that video game history part—collectors always revered it. A lot of the items selling for tons of money today are not the stuff that collectors 10 years ago cared about or even gave any credence to.
It's hard for a lot of us, myself included, to look at these auctions and say, five years ago, I could have bought that for $500 and it’s going for $50,000 now. But the market speaks. As video games collecting becomes more mainstream and as more people are getting into it, whether it's from ancillary hobbies, or just starting fresh, that's going to make a difference.
But going back to the NWC—NWC, we always cared about. I remember the first article I ever looked at when I started collecting back in 2006 or 2007. It was a Racket Boy article that had the rarest games, and the NWC was the number one. That was the Grail and we always talked about it. It was always the Grail. It's cool to see something that was historically considered by collectors to be something super valuable and like a trophy is still carrying that through this new phase of growth, where other factors are driving value.
We've seen this a lot in other categories: a lot of the grails are reaching levels where the average person has no real hope of ever attaining them. Unfortunately a lot of the time, we see the people that care the most have the smallest seat at the table, if any. There's a lot of money out there that's investing in this, and it's not necessarily always collectors. Everyone's buying it, including pure investors. So, to be able to maintain a foot in the door for the nerds out there that really care about this stuff, it's a happy medium for the time being. The fractional concept is still new to a lot of people, but hopefully collectors will start to see and understand it as a new concept that is going to open doors that maybe weren't even opened before.
Not only that, but from the investment standpoint, like you said, there's so much speculation and investment in stocks for something invisible, intangible, right? A lot of people, hardcore collectors, don't like when you're mixing investing and collecting and buying and selling, but at the end of the day, I think it's a lot cooler to invest in something that is physical, and that resonates with you and makes you feel good, rather than some account somewhere that doesn't mean anything other than the bottom line, the dollars. The fact that you guys have the gallery, even if it's closed right now, and you're able to go and see and touch and feel these things, makes it that much more personal—as personal as you can get for an investment essentially.
What's your opinion on where modern games are coming into this space now, as opposed to the more classic vintage games that are hitting these crazy high numbers?
From a sealed standpoint, the modern games offer a lot more accessibility—there’s a lot more out there—which is great. But, there's another trend, which is a shift in the price of sealed vintage games. NES games are just becoming impossible to acquire for someone who wants to come in, unless you want to spend five or six figures. The modern sealed stuff allows for people to get into the sealed side at a much more affordable price because there's no shortage of completed boxes of that stuff, but then you have the FOMO kick in and then someone wipes all the ones off on eBay and then the price escalates. It's going to be a while before the dust settles and we really know values on that stuff.
There's a lot of people coming into this that couldn’t give a shit about buying NES or Super Nintendo games, because they didn’t grow up with that. They grew up playing Call of Duty with their friends, just like people 20 years ago grew up playing Tecmo Bowl or GoldenEye in their college dorm rooms eating pizza late at night. We're seeing faster growth in the modern stuff, because just generally, generationally, a lot of people that are investing in alternative assets right now are younger, so the stuff that resonates with them is N64, GameCube, PlayStation 2, Xbox 360, Xbox. It's almost like the growth has been disproportionate to where those are in the collectible lifecycle. It wouldn't make sense if 30 years ago, a golden age Action Comics 1 was appreciating at the same value as Silver Age Amazing Fantasy 15. The first Superman and the first Spiderman—one is multiples more than the other. But in video games, it's almost like we're seeing instances where they're the same, or the newer one is exceeding because again, it's about what resonates with the collectors, and right now, a lot of the collectors driving the market are younger.
Are there any interesting trends you're seeing in the collectible video game market as a whole?
FOMO, for sure. And then what I talked about—the cultural part. I just saw a Modern Warfare for Xbox 360 on eBay, graded, sold for four grand or something. It was the package version, it wasn't even the original standalone release version. I see things like that, and some of the other spikes and I know that there's going to be some corrections in the market in the long run. But at the end of the day, people are being driven by emotion, like I said, and trying to see what the next big thing is. They saw the spikes in Marios.
There's still the biggest barriers I talked about: the reliable certification standards, transparency in the market. The third piece is education. We put out a Black Box article that changed the way people looked at and collected variants and Black Box overnight, because it was comprehensive information, it was resources.
That's the number one missing piece right now in the market for people coming in. There aren't enough resources for them to educate themselves. So the trend that I see is that people are acting with emotion because they don't have the information. I can't say whether that's good or bad for the long term. I know that it's going to cause corrections because there’s a disparity, but it's interesting to see what people are gravitating to, and again, it's a combination of the stuff that I talked about. It'll also be interesting to see when more information gets released, how that affects the market.
Wata obviously has a big role and a responsibility with population information. I've touched on this before, but first of all, any grading company that releases population information or has in the past—show me one that's done it in the first five years of operating. You have to hit a critical mass.
Further, we have to qualify the information so that it doesn't cause more harm than good. We have to explain some of the reasons why populations exist, especially for new collectors who don't know. A great example is selection bias—people initially sent in the rarer stuff, because they knew it was rare, and they wanted to encapsulate it and preserve it. So, the population report wouldn't be an accurate representation of what's actually rare or what's out there in the market. It’s a representation of what people sent us. Unless we either wait until we hit a critical mass that's a better representation, or qualify the information, or both, we'd be doing a disservice by releasing it. We 100% have a plan to release it. I really hope and want to release it in due time, because that information is really critical and will help the market. It's just a matter of doing it when it's appropriate.
What are some of the characteristics of a collectible game that investors or collectors should keep an eye out for that might signal value from an investment perspective?
That is a tough question to answer. I don't want to keep sounding like a broken record, but again, it goes back to that intersection of those different drivers of demand. We're in a phase where there is an information disparity. There is a lack of information and resources. A lot of people look at that as a bad thing or a barrier, but I can spin that and say it's an opportunity. It's an opportunity to dig a little deeper than just trying to look up on Google, “What should I buy for video games?”
Start joining communities, Facebook groups, talk to collectors who've been around for a long time, educate yourself, start playing around a little bit. Soon you'll have the ability to make decisions that are not necessarily, “This is gonna be a home run,” but rather, “This is what I want to invest in, because I feel x y z, I feel comfortable about it.” And also, “I feel good about it, so that if my investment goes down, I'm still happy.” At the end of the day, that's the really important thing, because there are going to be adjustments. But definitely taking advantage of this unique period we're in would be my advice, because pretty soon, a lot of this stuff is going to become more public and enable a lot more people to come in, and then it's going to level the playing field a lot more.
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