Roblox has inflated user numbers and downplayed the presence of child predators to investors

[Content note: This story discusses allegations of child sexual abuse.]

A new report from a research firm Hindenburg research claims that Roblox Corp. lies about player metrics for its titular gaming platform, and provides further details about its past issues with applying appropriate child safety measures.

Hindenburg investigates unethical business and financial reporting and accounting irregularities. Since its founding in 2017, the company has repeatedly uncovered suspected fraud and corruption cases and its findings have been used in financial crime cases.

Roblox Corp. is continuously active a loss for several quarters (about several years), and Hindenburg noted Robloxs The US core market could soon be saturated. Therefore, it is believed that Roblox Corp. released “inflated” user metrics to present a stronger image and increase its stock.

The company claims the developer has two separate book series that count users and “consistently overstate the number of players on its platform by 25-43 percent and hours of interaction by 100 percent.”

This indicates that players create multiple accounts, which are counted as multiple users rather than a single person.

For example, Roblox Corp. when referring to “people”. Daily active users (DAUs), suggesting to Hindenburg that each DAU is a unique individual. But SEC filings describe these DAUs as “not a measure of individual access.” Roblox,” and said that such investor metrics are not independently verified.

A former one Roblox The employee further backed up these claims by revealing that players may create multiple accounts for different games or to prevent their main account from being compromised. Roblox Corp. confirmed this in one 2023 SEC filingit “cannot accurately assess potential duplicate users.”

Other former employees argued this way Roblox can track users with alternative accounts. However, they claimed the financial group had effectively excluded more accurate reporting from the data team in order to release its own numbers to investors.

“They hire their own reporting groups to be responsible for the pipeline and report and calculate these numbers,” said a former data scientist. But finances are what ultimately get reported to Wall Street. […] And finance is the source of ‘truth’.”

More of this Robloxs Trivialized problems come to light

Hindenburg also investigated claims of sexually explicit material Roblox that are easily accessible to children – sometimes with the express intent of luring minors into abusive situations.

Roblox is reportedly home to predators looking to take advantage of younger players. According to reports, it was a long-standing problem for years and sparked concerns about child safety.

Earlier this year, a Bloomberg report claimed that employees became more vocal about these concerns with leadership after plans to resolve the issue were allegedly rejected. However, Roblox Corp. denied. the report and emphasized that players had “a safe and positive experience.” Roblox “every single day.”

Hindenburg’s research replicated “numerous cases of abuse” and child safety scandals Roblox which has already been reported over the years. These stories included young players participating in sex games on the platform, being solicited (or sent) for sexual content, and creating sex videos on the platform Roblox.

The company created several new ones Roblox Accounts of different ages to determine whether the platform has improved its security measures. It claims there is still no pre-screening to prevent accounts from being named after specific sex offenders, and that 900 players had usernames related to or inspired by Jeffrey Epstein.

Additionally, it has been claimed that in-game chat rooms have no age restrictions and are almost 40 years old Roblox In the groups, members openly demanded sexual favors and trafficked in child pornography. Moderation teams reportedly took action against some groups, but they were not completely banned from the platform.

Using an account created for a 9-year-old child, Hindenburg claims he was able to access several player-created games that had no age restrictions, meaning young players (who make up 21 percent of the community) could easily were able to access it.

The company also claimed that there were several instances where the company entered the aforementioned chat rooms and saw users soliciting minors for sex.

Hindenburg thought Robloxs Security settings are “ineffective” and that it is possible for users to bypass parental controls by creating their own or an alternative account without these restrictions.

Hindenburg’s report raises questions Roblox investors

In the end, Hindenburg concluded that Roblox Corp. “For years it has misleadingly inflated the purported number of ‘people’ on its platform and their engagement levels.”

“At the same time,” it said, “the company has cut moderation costs to appease Wall Street while endangering children with a platform that exposes them to illegal content and promotes pedophilia on a massive scale.”

Hindenburg’s complete, detailed report on Robloxs Excessive player numbers and the alleged lack of appropriate player moderation can be read about Here.

The game developer has Roblox Corp. Asked for a comment and will update when there is a response.