A blockbuster new report has made shocking new claims about one of the biggest video game platforms in the world, Roblox.
Launched in 2006, Roblox allows users to make games and experiences and share them, or play those games made by other users. The game itself is free, but in-game purchases that enable game creation and other benefits drive its profits. The game is available on Windows, mobile, Meta Quest, Xbox One, and PlayStation 4.
Now, a new report by Hindenburg Research has made the shocking case for why Roblox is a bad investment. And they reach this conclusion by revealing how they are a terrible company.
Hindenburg Research specializes in “forensic financial research.” Their work is to research companies for the financial world, by checking if their numbers are on the level, and if they are engaging in illegal activities. They also claim to have helped government agencies like the SEC and DOC in investigating financial crimes.
Now, reports have spread for years about how unsafe Roblox is for children. What Hindenburg has uncovered is truly deplorable, but if you have been following the company for years, it all falls in line with those earlier reports.
Hindenburg did try an experiment by making a new account. What they found was new users could be exposed to hate speech, images of genitalia, and other inappropriate content almost immediately.
But Hindenburg’s main insight is that Roblox has been lying about their profitability and growth to investors and the public. As Hindenburg pointed out, the company has been consistently bleeding money since they went public. As such, Roblox has to show investors that their metrics are doing well to keep them from leaving, and the company collapsing overnight.
Hindenburg found that they are inflating the number of Daily Active Users (DAUs) by adding multiple accounts they know are owned by a single person. Roblox has also lied about not being able to screen those accounts, and they keep the real data to themselves.
Hindenburg also believes that the company is lying about their Engagement Hours, AKA, the amount of time players spend on the game. The numbers they share to investors is also misleading, because a lot of Roblox games are designed to be AFK. Away From Keyboard games will allow players to leave the game as bots continue to play the game for them.
And AFK is an established game mechanic and genre, but in this context, Roblox is passing off this AFK activity as organic engagement. Hindenburg also found bots in Roblox that artificially inflate both DAUs and Engagement Hours.
While the main focus from this report should be Roblox, it should raise questions as to why Microsoft and Sony have allowed it onto their platforms. Notably, the likes of Nintendo, Valve, and Epic have not platformed Roblox for their players. Sony added them onto PlayStation 4 as recently as last year, ignoring red flags about child safety.
Somehow, Roblox has managed to skirt by accountability all these years. Hindenburg Research’s work may finally sway investors away, and also alert authorities to potential crimes.
As for us gamers, it doesn’t seem wise to keep playing Roblox, even if you are yourself an adult who knows what you’re doing.
