Zynga 2014 Annual Report Download - page 10

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Table of Contents
Our Network
Players progress faster in their games by connecting with friends and other players in our network to instantly get what they need to
complete quests, obtain virtual items and enhance their experience. We aspire to leverage our existing and new games to bring the best social
playing experiences to our audience. Our network enables users to discover new games, find and connect with new friends, challenge, cooperate
and compete with friends; all of which drives higher user engagement for games on our network.
Our Revenues
We generate revenue from the following online services:
Virtual Goods and Paid Downloads
Our primary revenue source is the sale of virtual currency that players use to buy in-game virtual goods. Virtual currency can also be
earned for free through game play or by accepting promotional offers from our advertising partners. We also generate revenue when players
purchase mobile game downloads.
Advertising and Licensing
Our advertising services offer creative ways for marketers and advertisers to reach and engage with our players. The goal of our
engagement-based advertising is to enhance the player experience while delivering real value to advertisers. Our advertising offerings include:
Marketing and Distribution
We acquire most of our players through unpaid channels by cross-promoting new games to our existing audience. We have been able to
build a large community of players through the viral and sharing features provided by social networks, the social innovations in our games and
the network effects of our games.
We are committed to connecting with our players. We have fan pages, generally on Facebook, for each of our games to connect with our
players; and we leverage various other forms of social media, including Twitter, to communicate with them. We periodically host live and online
player events. We also advertise our games within other mobile applications and on social networks such as Facebook via various in-app
advertising partners. In 2014 and 2013, we spent $101.7 million and $60.6 million, respectively, on these player acquisition costs.
Agreements with Facebook, Apple and Google
Our revenue depends on our continued ability to publish our games on Facebook and on mobile platforms, primarily the iOS and Android
platforms. We operate under the standard terms of service for Facebook, Apple and Google and any of these operators could unilaterally alter
their terms of service in a manner that could harm our business. For example, Apple has recently informed developers that beginning on
February 1, 2015 all applications that are submitted to the Apple App Store must include 64-bit support.
7
•
Branded Virtual Goods and Sponsorships
that integrate relevant advertising and messaging within game play;
•
Engagement Ads and Offers
in which players can answer certain questions, watch-to-earn engagements or sign up for third party
services to receive virtual currency and in
-
game bonuses;
•
Mobile Ads
through ad
-
supported free versions of our mobile games, such as
Words With Friends
;
•
Display Ads
in our online web games that include banner advertisements; and
•
Licensing
our brands.