Anyone reading this website probably already has a dim view of Roblox. Whether it's for the child labour stuff PMG raised recently or a host of other issues--from customer service to loot boxes to child predators--I think we'd all agree that it's a pretty shitty platform run by a pretty shitty company. But not even I, an avowed hater, was prepared for the depths of Roblox's reported shittiness until I read through a paper released by Hindenburg Research earlier today.
The firm, which uses "forensic financial research" to "aid our investment decision-making", is essentially performing journalism for investors. Which...look, we can talk about that another day (and keep the company's motivations in mind in particular), but what they've reported about Roblox takes everything we already knew was bad and cranks the dial past the point I thought it could be cranked.
The paper begins by laying down some pretty serious analytical and financial allegations: that Roblox has been massively inflating both its active userbase and playtime metrics in order to trick investors into thinking it's a growing business, despite losses in the billions and a total lack of profitability.
Our research indicates that Roblox is lying to investors, regulators, and advertisers about the number of “people” on its platform, inflating the key metric by 25-42%+. We also show how engagement hours, another key metric, is inflated by an estimated 100%+.
Hindenburg cite everything from encouragement for users to create AFK games--which inflate playtime metrics even though most people aren't actually "playing" those games most of the time--to bot farms in Vietnam. Shady! But the report keeps on rolling, past the white-collar money stuff into even more serious allegations about child safety:
After we found a username, we listed our age as “under 13” to see if children are being exposed to adult content. By merely plugging ‘adult’ into the Roblox search bar, we found a group called “Adult Studios” with 3,334 members openly trading child pornography and soliciting sexual acts from minors.
We tracked some of the members of “Adult Studios” and easily found 38 Roblox groups – one with 103,000 members – openly soliciting sexual favors and trading child pornography.
The chatrooms trading in child pornography had no age restrictions. Roblox reports that 21% of its users are under the age of 9, a number that is likely underestimated given that Roblox has no age verification aside from users seeking 17+ experiences.
Excuse me, what the fuck? How many members? How could this be happening at a company that is claiming to make billions?
Despite Roblox’s claims of “best in the world” content moderation, our interviews with moderators show safety was largely outsourced to Asian call centers. Moderators described being paid $12 a day to review countless instances of child grooming and bullying with a limited ability to keep perpetrators off the platform permanently.
Ah. Of course.
The report is very long--everything I quoted above is from its summary, not the report itself--but if you want to dig into the details (and keep Hindenburg's motivations in mind while doing so!), the full thing is here.
