Zynga 2013 Annual Report Download - page 26

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Table of Contents
An increasing number of individuals are utilizing devices other than personal computers to access the Internet, and versions of our games
developed for these devices might not gain widespread adoption, or may not function as intended.
The number of individuals who access the Internet through devices other than a personal computer, such as smart phones, tablets,
televisions and set-top box devices, has increased dramatically, and we believe this trend is likely to continue. Certain of our games or versions
of our games may not be compelling to players on such devices. In addition, each device manufacturer or platform provider may establish unique
or restrictive terms and conditions for developers on such devices or platforms, and our games may not work well or be viewable on these
devices as a result. To expand our business, we will need to support a number of alternative devices and technologies. Once developed, we may
choose to port or convert a game into separate versions for alternative devices with different technological requirements. As new devices and
new mobile platforms or updates to platforms are continually being released, we may encounter problems in developing versions of our games
for use on these alternative devices and we may need to devote significant resources to the creation, support and maintenance of such devices
and platforms. If we are unable to successfully expand the platforms and devices on which our games are available, or if the versions of our
games that we create for alternative platforms and devices are not compelling to our players, our business will suffer.
We have a new business model and a short operating history, which makes it difficult to evaluate our prospects and future financial results
and may increase the risk that we will not be successful.
We began operations in April 2007, and became publicly listed in December 2011, and we have a short operating history and a new
business model, which makes it difficult to effectively assess our future prospects. Our business model is based on offering games that are free to
play. To date, only a small portion of our players pay for our products. We cannot assure that any of our efforts will be successful or result in the
development or timely launch of additional products, or ultimately produce any material revenue.
We may choose to exit the real money gaming market completely to focus on our core business and, if we elect to participate in this market,
our efforts may not be successful.
In October 2012, we entered into an agreement with bwin.party to develop, test and operate certain real money online poker and casino
games in the United Kingdom. In the second quarter of 2013, we launched our first RMG offerings, ZyngaPlusPoker and ZyngaPlusCasino, in
the United Kingdom in connection with this agreement. We are evaluating our RMG products in the United Kingdom to determine whether or
not they are on strategy and aligned with our near term market opportunities and priorities. We may decide these products and participation in
regulated markets globally is consistent with near term market opportunities and priorities or we may decide to exit the market. We cannot assure
you that our RMG products, or any products or partnerships we may launch in the future will be successful, or ultimately produce any material
revenue.
In 2013, we decided to withdraw our application from the Nevada Gaming Control Board and made the focused choice not to pursue a
license for real money gaming in other U.S. jurisdictions at this time in order to focus our resources and priorities on what we believe is our
biggest opportunity, free to play social games. Our decision may not result in the long-term benefits that we expect, in which case the success of
our business and operating results could be harmed. In connection with our decision to refocus on our core free to play business, we are
evaluating our participation in global RMG markets. If we elect to participate in global regulated markets, gaming laws may require us, each of
our subsidiaries engaged in gaming operations, certain of our directors, officers and employees, and in some cases, our stockholders, to obtain
licenses or findings of suitability from gaming authorities. Gaming authorities have very broad discretion in determining whether an applicant
qualifies for a license or should be deemed suitable. If we are required to obtain a license to participate in a global RMG market, we cannot
assure you that we will be able to obtain a license in a timely fashion or that we will be able to obtain a license at all.
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