Robloxis one of the most popular video games on the market today.Its primary audience is younger than your traditional mainstream gaming demographic as a “kids game,” but there has been some cross-appeal with streamers like CaseOh playing theRobloxgameDress to Impress.
On Friday,Bloombergconfirmed that theUS Securities and Exchange Commissionis actively investigating Roblox Corp.However, the company couldn’t confirm details, citing that any information could “harm the ongoing enforcement proceeding.”
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The SEC responded to Bloomberg, saying, “We have confirmed with Division of Enforcement staff that there are responsive emails between Enforcement staff referencing Roblox and that these emails are a part of an active and ongoing investigation.”
It’s suggested that the investigation stems fromRoblox inflating its metrics last year, including the number of active users and the amount of time they spend on the platform, misleading investors. For those unaware, misleading shareholders is a crime commonly known as securities fraud, which would explain why the SEC is involved.
This isn’t a government agency’s first involvement in the game industry. Last year, the Federal Trade Commissionrefunded $72 million in unwantedFortnitepurchases.
Roblox Shares Have Fallen 20% During Q4 2024
Shares of Roblox fell as much as 20% during the 4th Quarter last year on the back of the game being banned in Turkey and accusations of causing video game addiction.
Bloomberg reported that the game’s daily active users dropped 4% by the end of 2024. Its user base of 85.3 million players was shy of Roblox Corp.’s goal of 88.4 million active users during Q4.
Player engagement fell, too, with nearly 10% of the player base spending less time playing than before.
Finally, Roblox Corp. posted revenue of $1.35 billion, short of their $1.37 billion target.
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The company has responded to some allegations by adding more restrictions forchildren, its primary demographic. Those under nine can no longer play games rated higher than “Mild,” while childrenunder 13 will see strong limitations on their accounts. The game will also introduce extended Parental Control features to improve the in-game experience and address concerns from other markets.
It remains to be seen if these changes will positively affect their bottom line.
