I've seen two distinct types of this damage. The one like in the photo, with the pock marks in the plastic - that is clearly heat/melt damage. You can even see further down the left side of the cart where the plastic is wrinkled from the heat. I've got a copy of Super Dodge Ball like this, which I find hilarious, because it's the only game I know of that actually has the "Do not store in extreme temperatures" warning on the end label as well.
It's definitely heat damage, because if you take the cart apart, the inside is bubbled and warped in the places the pock marks appear on the surface.
I've got a copy of Kings of the Beach that's a serious, severe case of this, the whole front of the cart is nearly white, and the plastic is very deformed.
The other variant of this I've seen, is where the plastic has white lines in and along the sides of the cart, on the end, etc - like the grey coloring faded out of it. But without the pock marks or warped plastic - just a marbled weird pattern to the fade. It might be related to moisture too - I found that if I leave a cart front in water overnight (a method I tried to make removing labels easier when making repros), I can get a bit of that fading to appear near the ridges in the cart. I will have to try leaving one for longer to see what happens.
The former, melted plastic damage is going to be irreparable. But the other fading? I'm not sure. I know that some people have figured out how to reverse the yellowing of old computer plastics, but I don't think this fading is the same type of problem. So, I really don't think there is any fix other than finding better copies of the damaged games, and to try to keep your games out of direct sunlight, avoid storing them in extreme temperatures, and don't feed them after midnight.
-Ian
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