Zynga 2012 Annual Report Download - page 59

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Research and development
Year Ended December 31, 2011 to 2012
% Change
2010 to 2011
% Change2012 2011 2010
(in thousands)
Research and development .................... $645,648 $727,018 $149,519 (11)% 386%
2012 Compared to 2011. Research and development expenses decreased $81.4 million in the twelve months
ended December 31, 2012 as compared to the same period of the prior year. The decrease was primarily
attributable to a $174.3 million decrease in stock-based expense. Stock-based expense associated with ZSUs in
2012 did not include the IPO related catch-up of expense, which had been recognized in 2011. These decreases
were partially offset by an increase of $66.2 million in headcount-related expenses, an increase of $10.7 million
in facilities and other overhead support costs and an increase of $8.1 million in consulting costs.
2011 Compared to 2010. Research and development expenses increased $577.5 million in 2011. The
increase was primarily attributable to a $364.7 million increase in stock-based compensation, mainly due to the
expense recognized for ZSUs that vested in connection with our initial public offering, an increase of $164.1
million in headcount-related expenses and an increase of $24.4 million in consulting costs due to the ongoing
investment in new game development, in addition to an increase in allocated facilities and other overhead support
costs of $19.7 million.
Sales and marketing
Year Ended December 31, 2011 to 2012
% Change
2010 to 2011
% Change2012 2011 2010
(in thousands)
Sales and marketing ......................... $181,924 $234,199 $114,165 (22)% 105%
2012 Compared to 2011. Sales and marketing expenses decreased $52.3 million in the twelve months ended
December 31, 2012 as compared to the same period of the prior year. The decrease was primarily attributable to
$56.6 million decrease in stock-based expense. Stock-based expense associated with ZSUs in 2012 did not
include the IPO related catch-up of expense, which had been recognized in 2011. Additionally, there was a $3.5
million decrease in marketing costs offset by a $4.2 million increase in headcount-related expenses, and a $2.6
million increase in amortization from acquired intangibles, as compared to the same period of the prior year.
2011 Compared to 2010. Sales and marketing expenses increased $120 million in 2011. The increase was
primarily attributable to a $73.4 million increase in stock-based compensation, mainly due to the expense
recognized for ZSUs that vested in connection with our initial public offering, a $23.2 million increase in player
acquisition costs, an increase in headcount-related expenses of $13.4 million and increase of $5.7 million in
consulting costs.
General and administrative
Year Ended December 31, 2011 to 2012
% Change
2010 to 2011
% Change2012 2011 2010
(in thousands)
General and administrative .................... $189,004 $254,456 $32,251 (26)% 689%
2012 Compared to 2011. General and administrative expenses decreased $65.5 million in the twelve months
ended December 31, 2012 as compared to the same period of the prior year. The decrease was primarily attributable to
a decrease of $81.8 million in stock-based expense. Stock-based expense associated with ZSUs in 2012 did not include
the IPO related catch-up of expense, which had been recognized in 2011. Additionally, there was a decrease of $10.2
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