Roblox Accused Of Lying To Investors About User Numbers

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%."

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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.