Roblox Refutes Hindenburg Research Report of Inflated Metrics
Photo Credit: Roblox
Roblox says claims made in a recent research report are ‘misleading.’ The report from Hindenburg Research alleges Roblox massively inflates the metrics it shares with investors while doing very little to curb child exploitation on its platform.
Hindenburg Research is a US-based investment research firm that engages in activist short-selling. The report says Roblox is not a profitable business and that its stock price is reliant on the growth metrics it presents to Wall Street. The firm believes Roblox has inflated these metrics—including the size of the audience and engagement hours. It also investigated allegations that children (under 13) can access pornography and chatrooms where they have the potential to be groomed by predators.
The report alleges that Roblox’s measure of how many people use its platform does not reflect the true number of daily active users. That’s because people can have multiple accounts, including bot accounts. The report suggests Roblox inflates the number of people who use its platform by 25-42% when speaking to investors, regulators, and advertisers. Hindenburg Research says it spoke with former Roblox employees who say the company keeps track of accurate metrics for internal business decisions, but maintains inflated metrics for investors.
Roblox calls these claims misleading in its statement addressing the report. “The authors are short sellers and have an agenda irrespective of the substance of Roblox’s business model and results.” The company clarified what it calls a daily active user (DAU) as someone who has logged in and visited Roblox either through the website or a game client on console, mobile, or PC.
“If a registered, logged in user visits Roblox more than once within a 24-hour period that spans two calendar days, that user is counted as a DAU only for the first calendar day,” Roblox says. “We believe this method better reflects global engagement on the platform compared to a method based purely on a calendar-day cut-off.”
Hindenburg Research hired a technical consultant to analyze 297.7 million rows of real-time player data across 7,200 Roblox games and 2.1 million Roblox servers. That review of around 30.4 million unique daily users found that Roblox users spend on average 22 minutes playing Roblox per day. The research firm says Roblox’s engagement hours metric is inflated by bot accounts that remain online for 24 hours at a time. It also alleges that Roblox incentivizes the creation of ‘away-from-keyboard’ (AFK) games to artificially boost engagement hours.
Aside from the alleged inflated engagement metrics, Hindenburg Research also looked at how minors interact with the platform. The report calls Roblox an “X-rated pedophile hellscape” and says that it exposes “children to grooming, pornography, violent content, and extremely abusive speech.”
A researcher registered a new Roblox account and checked the under 13 box. After logging in, the researcher was able to find and access dozens of groups with hundreds of thousands of users freely sharing child pornography and soliciting sexual acts from minors. Chatrooms for these groups contained no age restrictions. An interview with former Roblox moderators states that moderation is mostly outsourced to Asian call centers.
The report also accuses the Roblox C-Suite of cashing out after the company went public in 2021. Roblox insiders have sold $1.7 billion in stock and in the last 12 months alone, it claims insiders have sold $150 million in stock, with $115 million in stock sold by CEO David Baszucki.
Welcome to Billionaire Club Co LLC, your gateway to a brand-new social media experience! Sign up today and dive into over 10,000 fresh daily articles and videos curated just for your enjoyment. Enjoy the ad free experience, unlimited content interactions, and get that coveted blue check verification—all for just $1 a month!
Account Frozen
Your account is frozen. You can still view content but cannot interact with it.
Please go to your settings to update your account status.
Open Profile Settings