Zynga 2012 Annual Report Download - page 20

In June 2012, Facebook announced its plans to discontinue the use of Facebook Credits and instead will offer
pricing of our virtual goods in local currencies. Facebook will continue to retain 30% of the stated price for transactions
on their platform under the terms of their new payments program. We expect to begin our transition away from
Facebook Credits and to adopt Facebook’s local currency-based payments model in the first half of 2013.
On November 28, 2012, we amended our agreements with Facebook such that our use of the Facebook
platform and any data from Facebook on any Zynga service offered through a Zynga game page (for example,
the With Friends Network) will be governed by Facebook’s standard terms of service beginning on March 31,
2013. Under the current terms of service, we will be limited in our ability to use a Facebook user’s friends list
and Facebook’s communication channels to promote the With Friends Network. This may limit our ability to
reach Facebook users from the With Friends Network and may limit the number of players that use the With
Friends Network. In December 2012, Facebook amended its standard terms of service to prohibit (i) apps on the
Facebook canvas from promoting or linking to game sites other than Facebook and (ii) the use of emails obtained
from Facebook to promote or link to desktop web games on platforms other than Facebook. We will be
prohibited from cross-promoting traffic to games that are offered on platforms other than Facebook from our
games on Facebook. We will not be permitted to use e-mail addresses obtained from Facebook to promote
desktop web games that are not on the Facebook platform, subject to certain limited exceptions.
Beginning on March 31, 2013, we will no longer be obligated to display Facebook advertising units or
utilize Facebook’s payment services (Facebook Credits and/or local-currency based payments) on any such
Zynga game pages. We will have the right to process our own payments, and Facebook will no longer have the
right to receive 30% of the proceeds from payments made on the With Friends Network.
In addition, as of March 31, 2013, we will no longer be required to use Facebook as the exclusive social
platform for the Zynga properties, or be required to grant certain title exclusivities of Zynga games on the
Facebook platform, subject to certain exceptions. However, any social game launched after March 31, 2013 by
Zynga will generally be available through the Facebook web site concurrent with, or shortly following, the time
such game is made available on another social platform or a Zynga property.
The addenda, including our recent amendments, with Facebook will each expire in 2015. Our current
agreements with Facebook allow our users to use Zynga/Facebook co-branded game cards for the redemption of
Facebook Credits and also allows for our own Zynga game cards, which were previously printed and delivered to
our distributors and retailers, to continue to be sold to game players until all such cards are sold. We do not plan
to print and sell more of our own cards for redemption on the Facebook platform, however we have the right to
sell our own game cards on other platforms, including on the With Friends Network after March 31, 2013.
Our business may be harmed if:
• Facebook discontinues or limits access to its platform by us;
• Facebook terminates or does not renew or modifies our addenda or seeks to terminate our contractual
relationship altogether;
• Facebook determines that we are a competitor or otherwise prohibits us from offering our games on the
Facebook platform;
• Facebook modifies its terms of service or other policies, including fees charged to, or other restrictions
on, us, other application developers, or Facebook changes how the personal information of its users is
made available to application developers on the Facebook platform or shared by users;
• Facebook establishes more favorable relationships with one or more of our competitors; or
• Facebook develops its own competitive offerings.
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