Roblox refutes the claims made by Hindenburg Research and calls the financial claims in the report “misleading”
The American short-seller Hindenburg Research has accused gaming platform Roblox of inflating key metrics, including user numbers and engagement. The report released by the short seller on Tuesday claimed that the gaming platform has lied to investors, regulators and advertisers about the number of “people” on its platform, increasing the key metric by 25-42 per cent.
“According to Roblox’s own disclosures, daily active users (DAUs) are not a measure of unique individuals accessing Roblox because they can include numerous accounts run by a single person, such as alternate or bot accounts,” said Hindenburg in its recent report.
However, the company refuted the financial claims in the report and called them “misleading”.
“The authors are short sellers and have an agenda irrespective of the substance of Roblox’s business model and results,” said the company in a statement on October 9.
Hindenburg, citing interviews with multiple former employees of Roblox, revealed that the gaming company internally tracks every single user with multiple accounts and refers to the process as ‘de-alting’.
Additionally, the report highlighted that the gaming company has two sets of books for counting users. One is used for internal business decisions where multiple accounts are de-alted and the other is used by the finance team that shows higher metrics to investors.
The report said that Roblox has implemented the Silicon Valley approach of ‘growth at all costs’ and has employed ways from misleading investors to allowing illicit content unsuitable for children on its platform.
The short seller also alleged that the gaming platform is heavily compromising child safety. “Our in-game research revealed an X-rated pedophile hellscape, exposing children to grooming, pornography, violent content and extremely abusive speech,” the report revealed.
The allegations regarding child exploitation by Roblox aren’t new. Earlier this year, the Bloomberg Businessweek report revealed that the US police have arrested nearly two dozen people accused of abducting or abusing victims they’d met or groomed using Roblox. Moreover, the report claimed, “Roblox, the internet’s biggest recreation zone for kids, is fighting to keep predators away.” It pointed out that with nearly tens of millions of users under the age of 13, Roblox is the biggest online gaming playground for kids.
While Roblox’s chief safety officer, Matt Kaufman, reportedly said that the platform’s moderation systems scan all chat and other digital content, bleeping out inappropriate words and blocking players from sending images.