Zynga 2012 Annual Report Download - page 23

from mobile games. If we are unable to implement successful monetization strategies for our mobile games, our
ability to grow revenue and our financial performance will be negatively affected.
Our ability to successfully develop games for mobile platforms will depend on our ability to:
• anticipate and effectively respond to the growing number of players switching from web-based to
mobile games, the changing mobile landscape and the interests of players on mobile platforms;
• attract, retain and motivate talented game designers, product managers and engineers who have
experience developing games for mobile platforms;
• expand on our current mobile games;
• effectively market new mobile games to our existing web-based players and players of our current
mobile games;
• expand our With Friends Network to mobile;
• minimize launch delays and cost overruns on the development of new games;
• effectively monetize mobile games without degrading the social game experience for our players;
• develop games that provide for a compelling and optimal user experience through existing and
developing third party technologies, including third party software and middleware utilized by our
players; and
• acquire and successfully integrate high quality mobile game assets, personnel or companies.
These and other uncertainties make it difficult to know whether we will succeed in continuing to develop
successful mobile games. If we do not succeed in doing so, our growth prospects will suffer.
Any failure or significant interruption in our network could impact our operations and harm our business.
Our technology infrastructure is critical to the performance of our games and to player satisfaction. Our
games run on a complex distributed system, or what is commonly known as cloud computing. We own, operate
and maintain the primary elements of this system, but some elements of this system are operated by third parties
that we do not control and which would require significant time to replace. We have experienced, and may in the
future experience, website disruptions, outages and other performance problems due to a variety of factors,
including infrastructure changes, human or software errors and capacity constraints. For example, the operation
of CityVille was interrupted for several hours in April of 2011 and the operation of most of our games was
interrupted for several hours in January of 2013, in each case due to network outages. If a particular game is
unavailable when players attempt to access it or navigation through a game is slower than they expect, players
may stop playing the game and may be less likely to return to the game as often, if at all. A failure or significant
interruption in our game service would harm our reputation and operations. We expect to continue to make
significant investments to our technology infrastructure to maintain and improve all aspects of player experience
and game performance. To the extent that our disaster recovery systems are not adequate, or we do not
effectively address capacity constraints, upgrade our systems as needed and continually develop our technology
and network architecture to accommodate increasing traffic, our business and operating results may suffer. We
do not maintain insurance policies covering losses relating to our systems and we do not have business
interruption insurance.
Security breaches, computer viruses and computer hacking attacks could harm our business, reputation,
brand and results of operations.
Security breaches, computer malware and computer hacking attacks have become more prevalent in our
industry, have occurred on our systems in the past and may occur on our systems in the future. Any security
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