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Roblox refutes accusations of inflating metrics for merchants and failing to offer protection to minors

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Roblox has unsolicited claims on an unused list that accuses the company of misleading investors by inflating key metrics, as well as failing to protect younger users from sexual predators and irrelevant content.

The report was published through Hindenburg Research, a US-based investment research agency known for its activist short selling. He claimed that because Roblox is not a winning industry, its book value “depends on the growth metrics it presents to Wall Street” — metrics that Hindenburg believes the company is lying about.

In a comment posted online, Roblox insisted that Hindenburg’s claims – specifically the monetary ones made in the filing – had been “misleading,” including: “The authors are short sellers and have an agenda regardless of the substance of the model.” Roblox’s business and results.

Two key figures were analyzed in the report, the main one being the size of Roblox’s target audience. Hindenburg Research stated that Roblox’s measurement of ‘people’ choice on its platform does not reflect the actual choice of daily active users because there can be multiple accounts managed through a single person. person, along with exchange accounts and bot accounts.

Hindenburg alleges that Roblox inflates the number of people on its platform by between 25% and 42% when speaking to investors, regulators and advertisers. He also said that interviews with former Roblox employees revealed that the company tracks both accurate metrics for internal industry decisions and inflated ones for investors.

Roblox refuted those claims and clarified that it defines daily active users as anyone who logged in and visited Roblox through its website or gaming software “on a different registered account on a given calendar day.”

“If a registered, logged-in user visits Roblox more than once within a 24-hour period spanning two calendar days, that user is counted as a DAU for the first calendar day only,” the company added. “We believe this method better reflects overall participation on the platform compared to a method based solely on a calendar day limit.”

Hindenburg also claims that Roblox “grossly inflates” the range of engagement hours it studies. It says that at that time the company reported 2.4 reasonable hours of participation by age per person in 2023, that is, 58% more than the typical week that children ages 8 to 12 in the United States spend in all the mobile games.

The research agency hired a technical consultant to analyze 297.7 million rows of real-time player data across Roblox’s top 7,200 games and 2.1 million Roblox servers. This evaluation of 30.4 million unique daily users found that they spent an average of twenty-two minutes playing Roblox based on age.

Hindenburg claimed that the hours of engagement metric is inflated by bot accounts that stayed in the game for more than 24 consecutive hours, and accused Roblox of incentivizing developers to create “keyboardless” games that artificially increase hours of engagement. stake.

The filing also raised questions about coverage for minors, describing Roblox as “an X-rated pedophile hellscape, exposing children to grooming, pornography, violent content, and extremely abusive speech.”

Hindenburg recommended that there be no initial screening to prevent sexual predators from becoming members of the platform, and that Roblox’s social media options make it easy to target children.

The company found that even if they registered an individual account as a child under 13, they could find dozens of groups with hundreds of thousands of users openly trading child pornography and soliciting sexual acts from minors. Those teams’ chat rooms had pacing restrictions.

They were also prepared to have access to user-created Roblox games that included irrelevant content and stuff, such as titles in which players were challenged to attack homeless people and pregnant women, walk on a shooting rampage through a downtown health and sex simulation, all available with a children’s account.

When it comes to security measures, Hindenburg said that interviews with former Roblox moderators showing users protection were “largely outsourced to Asian call centers.”

Roblox questioned the risks posed to minors within its platform, stating: “Safety and civility have been fundamental to Roblox since the company’s inception nearly two decades ago, and the company has invested heavily throughout its history in their Trust and Safety efforts.

The company stated that millions of users of all ages can play Roblox games safely across all ages and that it takes irrelevant content or behavior within its platform “very seriously.”

In any case, Hindenburg Research accused Roblox experts of collecting $1.7 billion in books since the company launched in 2021. In the last 365 days, it claims that experts have sold $150 million in books, of which of which 115 million were purchased through CEO David Baszucki.

Roblox has a history of facing accusations about how it protects younger users, as well as a detailed list from 2021 about how its industrial style allegedly exploits children.

In July, a Bloomberg report claimed that prolific abusers were able to evade detection on the platform. Roblox responded to this, pointing to more than 13,000 child exploitation studies it conducted in 2023, which resulted in around 24 arrests.

In August this year, the sport was banned in Türkiye due to child protection issues. Two complaints were also filed against Roblox Ultimate Life; one related to the lack of child protection precautions, and another about an “illegal gambling network” for minors.

It was also the unhidden final life that Roblox used to be at the beginning and was no longer available on PlayStation due to Sony’s issues with child protection.





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