Zynga 2013 Annual Report Download - page 27

Table of Contents
In addition, regulatory and legislative developments, including excessive taxation, may prevent or significantly limit our ability, or the
ability of any entity with which we may partner in the future, to enter into or succeed in RMG. Becoming familiar with and complying with
these requirements will increase our costs and subject our business to greater scrutiny by regulators in many different jurisdictions. If our brand
becomes associated with RMG we may lose current players, advertisers or partners or have difficulty attracting new players, advertisers or
partners, which could adversely impact our business.
In addition, if we or our partners operate our RMG games in a negative manner, if players are less satisfied than expected with the games
provided or if we or our partners fail to comply with regulatory requirements, our reputation could be adversely affected and we may not realize
the anticipated benefits of this line of business or we may lose players and we may curtail our efforts in the RMG market.
Expansion into international markets is important for our strategy, and as we expand internationally, we will face additional business,
political, regulatory, operational, financial and economic risks, any of which could increase our costs and hinder our efforts.
Continuing to expand our business to attract players in countries other than the United States is a critical element of our business strategy.
An important part of targeting international markets is developing offerings that are localized and customized for the players in those markets.
We have a limited operating history as a company outside of the United States. We expect to continue to devote significant resources to
international expansion through acquisitions, the establishment of additional offices and development studios, and increasing our foreign
language offerings. For example, in February 2014 we completed the acquisition of NaturalMotion Limited, a company domiciled in the United
Kingdom. Our ability to expand our business and to attract talented employees and players in an increasing number of international markets will
require considerable management attention and resources and is subject to the particular challenges of supporting a rapidly growing business in
an environment of multiple languages, cultures, customs, legal systems, alternative dispute systems, regulatory systems and commercial
infrastructures. We have experienced difficulties in the past and have not been successful in all the countries we have entered. We may not be
able to offer our games in certain countries. Expanding our international focus may subject us to risks that we have not faced before or increase
risks that we currently face, including risks associated with:
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recruiting and retaining talented and capable management and employees in foreign countries;
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challenges caused by distance, language and cultural differences;
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developing and customizing games and other offerings that appeal to the tastes and preferences of players in international markets;
• competition from local game makers with intellectual property rights and significant market share in those markets and with a better
understanding of player preferences;
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utilizing, protecting and enforcing our intellectual property rights;
• negotiating agreements with local distribution platforms that are sufficiently economically beneficial to us and protective of our
rights;
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the inability to extend proprietary rights in our brand, content or technology into new jurisdictions;
• implementing alternative payment methods for virtual goods in a manner that complies with local laws and practices and protects us
from fraud;
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compliance with applicable foreign laws and regulations, including privacy laws and laws relating to content;
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compliance with anti
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bribery laws including without limitation, compliance with the Foreign Corrupt Practices Act;
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credit risk and higher levels of payment fraud;