Oct 09, 2024 10:53:00

Investment firm accuses Roblox of inflating its user numbers despite having 79.5 million daily active users

Investment firm

Hindenburg Research has found that Roblox , an online gaming platform that allows users to create and play games created by others, over-reports the number of users on the platform by 25% to 42%.

Roblox: Inflated Key Metrics For Wall Street And A Pedophile Hellscape For Kids – Hindenburg Research
https://hindenburgresearch.com/roblox/

Hindenburg statement FINAL - hindenburg-statement-final.pdf
(PDF file) https://s27.q4cdn.com/984876518/files/doc_news/2024/Oct/08/hindenburg-statement-final.pdf

Roblox accused of lying to investors about user numbers by Hindenburg Research - The Verge
https://www.theverge.com/2024/10/8/24265145/roblox-hindenburg-reseach-dau-child-safety-short-seller-report

Roblox, which went public in 2021, has grown into a popular online gaming platform with an average daily active user base of over 79.5 million in the second quarter of 2024, despite incurring large losses due to expenses such as fees for its distribution platform, developer compensation, capital investment in infrastructure and users, and research and development costs.

What kind of problems does Roblox, a game that has more than 380 million monthly active users but is in the red? - GIGAZINE

However, Hindenburg Research disputed Roblox's large user base. According to Hindenburg Research, Roblox reports a user base that includes subaccounts and bots in addition to real people. Roblox also explained that 'daily active users are not representative of unique individuals who access Roblox,' and that 'daily active users are measured using internal data, and the collection method is susceptible to algorithmic and other technical errors.' It added that 'Roblox's daily active user numbers have not been verified by an independent third party.'

Furthermore, Roblox data monitor RoMonitor reported that there were approximately 7.4 billion Roblox accounts at the time of writing, roughly the same as the population of the Earth. Hindenburg Research pointed out that 'Roblox's metrics clearly include a large number of sub-accounts and bot accounts.'

In fact, on the internet bulletin board site Reddit, in response to the question 'Do you have sub-accounts on Roblox?' many users reported that they 'do have sub-accounts.'

In response to these criticisms, Roblox explained that 'we cannot determine whether a user has multiple accounts, and as a result, it is difficult to accurately estimate potentially overlapping users.' On the other hand, a former Roblox software engineer said , 'We can internally track a single user with multiple accounts, and we can identify the number of users excluding sub-accounts by performing a process called 'De-Alting.''

In response to these allegations, Roblox said, 'We categorically deny the allegations made by Hindenburg Research. Hindenburg Research's allegations are misleading. We also said about fraudulent accounts created by sub-accounts and bots, 'These accounts create the illusion that we have more users than we actually have, but we work hard to detect and minimize fraudulent activity and unauthorized access.'