Update October 9th, 12:18PM: Unsurprisingly, Roblox Corporation has said that it refutes the allegations brought by Hindenburg Research in the report we originally covered in this story.
In its own statement, Roblox Corporation says Hindenburg's financial claims are "misleading", and that the company takes content or behavior that contravenes its guidelines "extremely seriously".
What's more, Roblox Corporation says the Hindenburg report's authors "neglected to accurately report on the company's public disclosures", and that the corporation "looks forward to discussing its most recent financial results" later this month.
Looks like this fight is far from over. Original story follows, unedited, below.
Original story: A damning new report has emerged that accuses Roblox and its creators Roblox Corporation of fostering an "X-rated pedophile hellscape" on the platform, as well as lying to investors about engagement and more.
The report comes courtesy of Hindenburg Research, and it's an incredibly comprehensive and lengthy document backed up by a huge amount of research, as well as conversations with former Roblox data scientists and developers.
Some of its more shocking findings include discovering that Roblox groups are "openly soliciting sexual favors and trading child pornography", and that users have "identified issues of simulated rape, naked users, and rampant in-game sexual harassment".
Additionally, Hindenburg Research's report found that moderation was "largely outsourced to Asian call centers", and that moderators were "paid $12 a day to review countless instances of child grooming and bullying".
What's more, Hindenburg says moderators have a "limited ability to keep perpetrators off the platform permanently", suggesting perhaps that Roblox Corporation's decision to cut its trust and safety spending earlier this year was not a particularly sound one.
As well as the horrifying details of what the company found during its time on Roblox (of which there are many, many more in the full report), Hindenburg Research also says its data suggests Roblox Corporation could be lying to its investors and advertisers about its engagement and user numbers.
Roblox Corporation says its per-user-per-day engagement hour rate was around 2.4 hours in 2023, but Hindenburg's report says the studio "could be massively overstating" this number, and that its own research found users were spending just 22 minutes or so in Roblox games per day.
One former Roblox data scientist told Hindenburg Research that the platform's actual number of daily active users (DAUs) could be "like anywhere between 30 to 20 percent lower" than the number Roblox itself states.
According to Hindenburg's research, Roblox Corporation effectively reports two different user numbers: one that includes users with multiple alternate accounts, which is for "internal business decisions", and one that discounts alts, which is for investors.
The full report is well worth a read; it's an exhaustively-researched look at just how much Roblox Corporation might be getting away with, and since safety concerns have been raised by other entities as well, including investigative YouTube channel People Make Games, much of it is likely to be accurate.
The report also appears to have caused Roblox shares to fall by almost 10%, although stock prices tend to fluctuate so regularly that this might not be an indication of long-term damage. We'll bring you more on this as soon as we get it.