Hindenburg Exposes Roblox's Inflated Metrics, Child Safety Concerns (Image:Roblox)
Hindenburg Research which is famous for its takedown of Adani Group has now accused Roblox, a popular US-based gaming platform of inflating its user numbers and engagement metrics as it been exposed on Tuesday. Hindenburg alleges that Roblox misrepresents its daily active users (DAUs) by counting visits from bots and alternate accounts, artificially boosting numbers by 25-42%. Additionally, the research firm claims that Roblox compromises child safety exposing kids to harmful content.
We tested out Roblox’s experiences to see what else kids were being exposed to.
We quickly encountered images of male genitalia and hate speech in Roblox’s “school simulator” game, which had registered 28.9 million visits with no age restrictions.
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— Hindenburg Research (@HindenburgRes) October 8, 2024
The report also exposes Roblox’s failure to protect children from predators, pornography and violent content. Despite knowing about these issues, the company has allegedly prioritised growth over child safety. The platform allows paedophiles to target children with no up-front screening and child pornography and sexual content are easily accessible. Games on the platform promote violence, hate speech, and harmful behaviour putting children at risk, Hindenburg stated.
In the game “Beat Up The Pregnant”, users hacked pregnant women to death in a Wal-Mart parking lot with machetes or killed them with frying pans or a selection of guns.
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— Hindenburg Research (@HindenburgRes) October 8, 2024
Additionally, the report suggests Roblox has overstated engagement hours by 100%+ with users spending only 22 minutes per day in games, not 2.4 hours as claimed. This inflation of metrics is suspected to be driven by bot activity and “AFK” (Away From Keyboard) games that artificially inflate engagement. These findings raise concerns about the accuracy of Roblox’s financial reports and its ability to attract advertisers, as per Hindenburg. However, Roblox denies the allegations stating they’re untrue. The company said that it generates most of its revenue from in-game purchases using its virtual currency.
A former Roblox senior product designer revealed that prioritising user engagement over safety has been a concern with leadership often prioritising metrics over safety. This concern is amplified by Roblox’s reported 2% decline in trust and safety expenses for Q2 2024. Although, the latest allegation led to a 9% drop in Roblox shares.
Overall, we think Roblox has adopted the Silicon Valley approach of ‘growth at all costs’, whether by misleading or outright lying to investors about its key metrics or by opening its platform to dangerous predators and illicit content unsuitable for children.
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— Hindenburg Research (@HindenburgRes) October 8, 2024
On the contrary, Wedbush Securities analyst Michael Pachter disputes Hindenburg’s claims. He argued that they misunderstand how gaming platforms work and with Roblox’s 79.5 million daily active users in question the debate over child safety on gaming platforms continues, he said. Hindenburg has previously targeted high-profile companies linked to Carl Icahn, Gautam Adani, and Super Micro Computers this year.
Also, read| “Maintained Her Complete Silence For Weeks”: Hindenburg On New Allegations Against SEBI Chief
