Things appear to be going from bad to worse for the beleaguered kids’ MMO Habbo.

The bad news for Habbo studio Sulake continued today as private equity group 3i, the largest single shareholder in the company, announced that it is dumping its 16 percent interest following an investigative report into the prevalence of pedophiles in the game.

“3i has actively supported the Sulake board in determining the right course of action in these very challenging circumstances,” it said in a statement. “Following a board meeting today, we have resigned our board position and will cease to be a shareholder in the company.”

The move follows a similar sale by Balderton Capital, the second-largest investor in Sulake, which unloaded its 13 percent stake in the company before the report even aired. Several major U.K. retailers have also stopped selling prepaid Habbo cards.

In the wake of the Channel 4 investigation, the U.K.’s National Society for the Prevention of Cruelty to Children said that it has had concerns “for some time that websites designed for children and young people are vulnerable” to predators. NSPCC rep Jon Brown acknowledged that online predators can be “extremely skilled and extremely inventive” and said that it’s ultimately up to parents to monitor what their kids are doing online, but added that the industry needs to take the issue more seriously.

“They’re reluctant to,” he said. “It’s not very good publicity for them to say, ‘This is a fantastic resource for their child, and they may also be targeted for abuse.'”

Sulake has decided to mute all conversations on the site while it reviews its long-term plan to improve security and protect its users. “This decision has not been taken lightly and underlines the company’s continuing commitment to ensure that all our site users remain safeguarded from inappropriate behavior and conversations,” CEO Paul LaFontaine wrote. “Our internal investigation is currently on-going, but we will be sure to inform all users of further developments in the coming days and weeks.”

Source: The Guardian

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