Roblox shows how digital services can hide exploitation | This Week in Business

This Week in Business is our weekly recap column, a collection of stats and quotes from recent stories presented with a dash of opinion (sometimes more than a dash) and intended to shed light on various trends. Check back every Friday for a new entry.

This week started with People Make Games releasing a second excellent video looking into Roblox and the company's deeply fraught treatment of its younger users.

There's a whole lot in there to take issue with, starting with the company's appalling lack of interest in actually answering specific questions about its stock-market-like collectibles trading and lack of protections for children working for other creators. Instead, Roblox leaned on People Make Games to pull its original report and criticized the outlet for asking questions that were not objective, because Roblox apparently believes responsible journalism requires you to keep an open mind about the possibility that child exploitation is a good thing? It's unclear.

QUOTE | "This success is alarming because Roblox right now is setting the standard for what society expects in the future of digital labor, of internet child safety, and accountability of big tech. The CEO of Roblox now has a net worth in the billions. The company makes decisions that affect tens of millions of young people. And yet when we ask them questions where Roblox's own policies appear actively harmful to their young users, we were told that we weren't being objective, while this company refused to even admit the existence of the collectibles stock market they created, of the underground black market website that they allowed to exist.

"They didn't say anything to us about this questionable reality of kids working underneath other kids. They told us that we weren't seeing the bigger picture while refusing to even admit the existence of whole parts of this picture." - People Make Games' Quintin Smith capping off the outlet's second video examining Roblox's business practices.

I think that's the most important part of the story right there. If you need a takeaway, it's that Big Tech and video games in general are aggressively pushing into areas that are understood poorly and regulated even worse. Child labor laws were not designed to account for kids creating digital items for other people to resell within a closed ecosystem for company scrip that can be cashed out into actual currency after the company takes an outsized cut of the proceeds. Tax laws were not designed to account for that exchange of real-world value happening across borders millions of times a day.

But you can't call attention to these problems -- much less fix them -- until you fully understand them. And that process is made so much harder by a lack of transparency that's all but intrinsic to modern tech platforms.

QUOTE | "I'm a journalist of technology and games, and it took me months to unpick how Roblox operates. And that was only with the help of dozens of Roblox users explaining things to me. What hope do most parents and politicians have of understanding exactly what their kids are doing on Roblox, or with who, or the many and varied ways that Roblox corporation is profiting from them?" - Smith, explaining how some of the more objectionable parts of Roblox's business model -- like its digital collectible market -- were overlooked in People Make Games' first report on the company's concerning treatment of its largely young audience.

Any journalist who has ever covered the business side of a free-to-play live ops game they don't play themselves will likely relate to this. These games have byzantine monetization and gameplay systems that intertwine and evolve over time, and it's incredibly difficult to wrap your head around exactly what they entail from the outside.

There's a reason games have tutorials, a reason free-to-play games in particular layer on additional systems over time, and a reason developers on mature games-as-a-service spend so much time worrying about their onboarding process. Without that experience and time served, there's just no way outsiders will be able to parse a wall of gameplay systems and currencies and distinct resources to figure out what's important, what's extraneous, where the pain points are, how much of the monetization is truly optional, etc. It doesn't help that the storefronts typically exist only within the games and can be introduced only after a certain amount of gameplay has been reached.

And if outsiders can't easily discern what's happening in these games, they can't monitor it, raise alarms about it, report about it, or regulate the harmful aspects of it. Everything happens out of sight, and when someone does bother to dig into it -- as People Make Games did -- there's less chance of that getting traction or building outrage because it's been happening for years and none of it is really "new."

In this case, Roblox added limited items and the ability to trade with others in October of 2009, a year before the free-to-play game even hit 1 million users and six or seven years before it was actually covered on mainstream sites like GameSpot or IGN.

By the time anyone outside Roblox cared to look, the collectible stock market and exploitative business model was already normalized for everyone playing and making the game. And without that smoking gun -- that shocking revelation of breaking news that nobody was aware of before -- these kind of transgressions tend to not be widely re-reported on by other outlets and fade away with the next news cycle.

I don't think these sorts of business models were designed with the explicit intent of hiding shady business from prying eyes, but I do think that's been a happy coincidence for a lot of free-to-play companies, Roblox included.

This has been going on for a while in games, and the world generally, and the process has been accelerated wildly by the advent of smartphones. The general problem is that everything's incredibly complex, there are no guardrails in place, and companies have shown little interest in providing any sort of transparency unless forced to by law.

As another recent (but significantly less serious) example, when Twitch launched its streaming player on the Nintendo Switch last month, there was a bit of text on the store page that caught my eye.

QUOTE | "Please note: This app features Nielsen's proprietary measurement software which contributes to market research, like Nielsen's TV Ratings. Please see http://priv-policy.imrworldwide.com/priv/mobile/us/en/optout.html for more information." - A footer on the Nintendo.com page for the Twitch app.

"More information" is one of my favorite things, so of course I went to that link for details about how Nielsen would be snooping on Switch users.

QUOTE | "Nielsen believes that you should have a choice about whether to contribute to our research and insights. To opt out of Nielsen measurement on this device, you need only to deactivate/activate 'App Tracking/Limit Ad Tracking' (for iOS devices) or 'Opt out of Ads Personalization' (for Android devices) option in your device's settings." - Nielsen's website, as referenced on the Twitch app eStore page.

Nielsen may believe that I should have a choice, but it isn't actually giving me one. The Nielsen page clearly wasn't written with the Switch app in mind. It makes no mention of how to opt-out of ad tracking and personalization on the Switch, and the console doesn't have any kind of generalized opt-out of ad tracking feature, so there's not even a rough equivalent those instructions could point you to. (Nintendo did quietly add in an option to opt out of sharing your eShop data with Google Analytics earlier this year, but there's no indication it would apply to any other tracking.)

I actually went looking for a tracking opt-out function of any sort in the Twitch app and couldn't find one. If such a thing exists, it isn't clearly labelled.

The Nielsen website also doesn't actually tell you exactly what it's tracking, instead vaguely saying it helps its clients measure "how consumers engage with media across online, mobile and emerging technologies." Is it keeping track of what streamers are being watched and how long? It says the information won't be used to identify me, but that doesn't mean the information is anonymized to the point where it couldn't be used to identify me. Is it able to track what other games I'm playing on the Switch, or what I'm buying in the eShop?

After all, one of the primary reasons for Apple to clamp down on iOS tracking was because the average app had six different data trackers on it, often built into the tools developers used to make the apps in the first place. (If you don't think a gaming console like the Switch and a smartphone like the iOS are reasonable comparables, I'll just point out that Nielsen's opt-out instructions suggest otherwise.)

We reached out to Nielsen when the app launched last month and never heard back. We reached out to Nielsen (again) and Nintendo and Twitch on Monday to ask how users can opt-out of tracking on the Twitch Switch app. Nintendo said we should ask Twitch about it. Twitch and Nielsen never responded.

The way this app was launched -- the lack of care taken in how the opt-out process was communicated and the complete disregard for users' right to control their data -- is in no way remarkable in my experience. I can't tell you how often companies send over press releases with links to the fine print pages of their site that aren't even live when the email goes out.

It's why our original story about Ubisoft Quartz mentioned a representative telling us the publisher wouldn't take a transaction fee when its NFTs exchanged hands, but the legal fine print on the site that went live after the embargo time specified that Ubisoft absolutely could take a transaction fee. (A representative later told us Ubisoft will not take a transaction fee "for the foreseeable future" but the terms of use were written to allow for that to change.)

The common thread in both the Roblox and Twitch on Switch cases is that the digital age has flipped transparency on its head. Decades ago, any company offering a good or service had to reveal everything to the customer before any kind of purchase decision was made. So everything about that service had to be upfront, both for prospective customers and for any other interested parties. These days, everything is about having a direct relationship to the customer, bringing them out of the public square into the back alley of your ecosystem with something free, and then making the real pitch, exposing your business model to as little public scrutiny as possible. As customers, we have so much less insight into the business of the companies we support before we go into business with them.

At the same time, the companies we do business with know more about us than ever before. They can target audiences, track behavior, analyze and optimize what does and doesn't work to the nth degree. Decades ago, it was fire and forget. Put something in a box, sell it to Walmart, and hope that whoever ends up with the thing likes it and tells their friends. Maybe they send in a registration card and you get some scrap of information about who your customer is. Today our behavior is monitored and cross-referenced and regurgitated back at us with algorithmic ads as invasive as they are ill-considered. (I once bought a wine fridge off Amazon; for months afterward, I was getting targeted ads to buy more wine fridges from Amazon.)

There is an asymmetry in the information here. Companies have entirely too much of it, while the rest of us have entirely too little

There is an asymmetry in the information here. Companies have entirely too much of it, while the rest of us have entirely too little. Users don't know what they're agreeing to and even if they do the legwork, companies can always break out their best James Earl Jones impression. There's such an explosion of experimentation (and exploitation) in the gaming space -- so much of it invisible or incomprehensible to outsiders -- that the media can't cover it all even superficially, much less with the scrutiny and rigor these things deserve.

And politicians? The law barely kept up with the pace of innovation before the internet. Amazon somehow made it to 2017 without collecting state sales tax throughout the US. Uber and Airbnb are still skirting taxi and hotel regulations around the world, although a number of governments have started to realize that the reason those regulations exist don't go away just because something is done through an app.

It's enough to make you feel helpless. But feeling helpless is a self-fulfilling prophecy. Speaking up and criticizing companies for dodgy business practices, clearly disregarding user privacy, and evading laws designed to protect people won't always change the way those companies operate. More often than not, it may come and go without an observable impact.

But the people running these companies and making these decisions aren't completely detached from the world. They can hear that kind of criticism and feel the pushback. And they can see the criticism and pushback directed at other companies as well. Even if a company that has publicly committed to a sketchy endeavor won't swallow its pride and reverse course, decision-makers at other companies will remember the uproar and factor it in the next time that issue crosses their desks.

And sometimes -- just sometimes -- standing up and calling a company out for its actions actually works.

QUOTE | "There are highly efficient chains such as Solana and Polygon, yet there is still a high demand for Ethereum. Btw, Ethereum is moving to a more sustainable mining model. Anyway, we are blockchain agnostic." - When asked why GSC Game World would use the more ecologically irresponsible wasteful proof-of-work blockchain tech for Stalker 2 NFTs, the studio essentially admits it's just a matter of popularity.

QUOTE | "Interoperability." - GSC Game World CEO Evgeniy Grygorovych, when asked why GSC Game World would use blockchain technology when it could auction off the rights it's tying to the NFTs directly. The company did not commit to supporting NFTs minted by other companies, and did not name any other company that would use the Stalker 2 NFTs.

QUOTE | "We are transparent in everything we do." - Grygorovych, shortly after saying the company has not even considered revealing management's personal investment in blockchain assets. (The company did later confirm management had such assets, but did not detail them any further.)

STAT | 662 - The number of people quote-tweeting the Stalker 2 NFT announcement as of this writing, the vast majority of them deeply critical of GSC Game World.

QUOTE | "Dear Stalkers, we hear you. Based on the feedback we received, we've made a decision to cancel anything NFT-related in Stalker 2... If you care, we care too." - GSC Game World pulls the plug on its NFT plans after fan backlash, essentially admitting (again) that it's just a matter of popularity.

The rest of the week in review

QUOTE | "We had to really rethink that aspects of multicultural Britain had failed. Our impact on Britain had been positive but Britain still didn't accept us, or the white establishment of the British government still didn't accept us. So that perspective was kind of a lie really, that's what was revealed." - Windrush Tales narrative designer Chella Ramanan talks about the mid-development shift of the game's tone. It had been intended to celebrate the success of a multicultural Britain through stories of post-WW2 African-Caribbean immigrants, but the 2018 Windrush scandal -- in which the government was found to be deporting and denying legal rights to scores of Windrush generation members -- prompted a change in approach.

QUOTE | "The industry needs to step up and be held accountable for treating whole demographics of people as lesser than. The industry needs real, tangible change to make sure that people in marginalised communities feel safe in this space." - Content creator and #ADayOffTwitch co-organizer RekItRaven gets to the heart of a key problem in games as part of our 2021 Game Changers project.

QUOTE | "We are not in the business of breaking stereotypes, but reinforcing them." - A manager at Wildlife Studios reinforces stereotypes about bad games industry bosses in an internal report about a "culture of moral harassment" at the Brazilian mobile studio.

QUOTE | "I know that they need to be trusted to be your advocates -- not labeled as 'enablers' or seen as company resources who provide bad actors with safe harbor." - Bungie head of HR Gayle d'Hondt, in a letter to staff, explains that she is stepping down and calling for a new HR leadership team "largely comprised of people new to Bungie." Last week IGN reported on problems with sexual harassment and work culture at the studio, which included mention that abusers were seen as being protected by people in HR.

QUOTE | "All workers deserve a union and a say in how their workplace is run, no matter where they work, what their employment status is, or what kind of conditions they work under." - Vodeo Games producer Myriame Lachapelle, in announcing that the newly formed Vodeo Workers United is the first certified game studio union in North America.

QUOTE | "Unionisation has been gaining ground as labour relations problems have started to make free snacks, break room pool tables and office Nerf gun battles look like a rather poor substitute for actual workers' rights" - Our own Rob Fahey assessing the current push for unionization in games.

QUOTE | "Players are currently experiencing extremely long wait times due to the dense concentration of play hours which far exceed our server capacity, especially during the peak times, and so we have decided to temporarily suspend the sale and delivery of Final Fantasy 14 Starter Edition and Complete Edition." - Final Fantasy 14 producer and director Naoki Yoshida explains that the game is so popular the publisher has decided to stop selling it for now.

QUOTE | "While more than two months have passed since the official launch of Final Fantasy 14 service, we deeply regret that the game has yet to achieve the level of enjoyability that Final Fantasy fans have come to expect from the franchise, and for this we offer our sincerest of apologies." - Square Enix president Yoichi Wada in 2010, announcing that Yoshida had been put in charge of the game in a post confirming that previous producer Hiromichi Tanaka had fallen on his Buster Sword and would step down from the project.

QUOTE | "Note that at this time we have not included the 'other' or non-binary data in our representation calculations but intend to do so in future quarterly updates." - Activision Blizzard, in the fine print of its first Representation Data report, explains that it is literally pretending its non-binary employees don't exist.

QUOTE | "Unpacking isn't actually about finding what you deem is the perfect place for each of the protagonist's belongings. While it very much scratches that itch, Unpacking is a human adventure about discovering someone through their possessions, and learning more and more about their life with each move." - Marie Dealessandri kicks off our staff writers' Games of the Year features with her excellent piece on Unpacking.

QUOTE | "Plowing somebody's face into the ground with an oversized battle axe has a surprising amount in common with riding a bike." - Me, on revisiting Soulcalibur 20 years later as part of a Game of the Year write up celebrating the games of yesteryear.

QUOTE | "There will be many stories of Ian's great leadership skills and vision, but my abiding memories are of the man behind the figurehead. I remember a rounders game at Sefton Park in Liverpool: Ian captained one side and I the other. We had a side bet that if my team won he'd make me coffee for a week... I never did get a single cup." - Inflexion Games' Neil Thompson was one of many paying tribute to Imagine Software, Psygnosis and Evolution Studios founder Ian Hetherington this week.