In new accusations from the investment firm Hindenburg Research, Roblox has landed themselves in hot water, as they are accused of lying to investors about their user numbers. Hindenburg Research has claimed that it is “consistently overstating the amount of people on its platform by 25 percent to 42 percent or more.” This isn’t the first time Roblox had some trouble, as Roblox has been banned from Turkiye for possible child exploitation. While they are said to be working with the government to try and fix this issue, it seems that Roblox is still blocked. Roblox went public in 2021 and reported that they had 79.5 million daily players. However, Hindenburg claims that this number is statistically incorrect.
Hindenburg is claiming that Roblox “intentionally conflates” actual people with daily users, where that number has the potential to include alt accounts and bots, which is a huge problem on the platform. The research released by Hindenburg alleges that Roblox is capable of separating alt accounts from single users, although Roblox has disclosed that daily active users “are not a measure of unique individuals accessing Roblox.” In their report, they also say that their research indicates that “engagement hours, another key metric, is inflated by an estimated 100%.”
The report also mentions that before Roblox went public, it would report the number of “people” on its platform, saying “there are over 54.1 million people coming to Roblox every day” in a 2022 report. However, Hindenburg says that the number of ‘people’ matches Roblox’s reported Daily Active Users. As stated above, they disclose that their DAU is not a measure of unique individuals. As a result, Hindenburg believes that they are intentionally conflating “people” with DAUs.
In 2023, Roblox told the SEC that it is “unable to identify if a user has multiple accounts,” a response that Hindenburg believes is a lie. This is after multiple former employees spoke to Hindenburg Research, saying that “Roblox does internally track single users with multiple accounts, referring to the process as de-alting.”
The report made by Hindenburg is incredibly lengthy and says that in interviews, “Roblox effectively has two sets of books for counting users: one for internal business decisions, in which multiple accounts are de’alted’, and one used by the finance team that reports higher metrics to investors.”
Roblox as a platform continues to grow, and whether this highly detailed report will have any effect on the company or whether they will now have to answer to these allegations remains to be seen, but it’s possible that the investors will not be happy if Roblox has been making out that they are more successful than they actually are.
