Zynga 2014 Annual Report Download - page 11

Table of Contents
In 2014 we derived 43% of our bookings and 51% of our revenue from Facebook and 51% of our bookings and 44% of our revenue from
mobile platforms, such as Apple’s App Store for iOS devices and the Google Play App Store for Android devices. In 2014 an increasing number
of our players were generated from mobile platforms.
Our use of the Facebook platform and data derived from Facebook is governed by Facebook’
s standard terms of service. Our use of mobile
platforms and data derived from mobile platforms is also governed by the standard terms of service of the mobile platforms, primarily Apple and
Google.
Research and Development
We believe continued investment in enhancing existing games and developing new games, and in software development tools and code
modification, is important to attaining our strategic objectives. Our research and development expenses were $396.6 million, $413.0 million and
$645.6 million in 2014, 2013 and 2012, respectively, which included stock-based expense of $83.7 million, $61.9 million and $200.6 million,
respectively.
Technology and Tools . We have invested extensively in developing our proprietary technology stack, which has the ability to handle
sudden bursts of activity for millions of players over a short period of time with high levels of performance and reliability. Our proprietary
technology stack includes datacenter and cloud computing management, a shared code base, network and cross-promotional features and
proprietary data analytics. Our technology stack also supports the growth of our 2D and 3D game engines across the mobile business in addition
to supporting high-level security and anti-fraud infrastructure. We are also investing in machine learning. We believe that investing in
technology and tools, including the simulation technologies we recently acquired with our purchase of NaturalMotion, can create competitive
advantages as well as extend our technology leadership. We will continue to innovate and optimize across our technology and tools to deliver
cost-effective, high performance and highly available social games.
Intellectual Property
Our business is significantly based on the creation, acquisition, use and protection of intellectual property. Some of this intellectual
property is in the form of software code, patented technology and trade secrets that we use to develop our games and to enable them to run
properly on multiple platforms. Other intellectual property we create includes product and feature names and audio-visual elements, including
graphics, music, story lines and interface design.
While most of the intellectual property we use is created by us, we have also acquired rights to proprietary intellectual property. We have
also obtained rights to use intellectual property through licenses and service agreements with third parties. These licenses typically limit our use
of intellectual property to specific uses and for specific time periods.
We protect our intellectual property rights by relying on federal, state and common law protections, as well as contractual restrictions. We
actively seek patent protection covering inventions originating from the company and acquire patents we believe may be useful or relevant to our
business. We control access to our proprietary technology by entering into confidentiality and invention assignment agreements with our
employees and contractors, and confidentiality agreements with third parties. We also actively engage in monitoring and enforcement activities
with respect to infringing uses of our trademarks, copyrights and domain names by third parties.
In addition to these contractual arrangements, we also rely on a combination of trade secret, copyright, trademark, trade dress, domain
name and patents to protect our games and other intellectual property. We typically own the copyright to the software code to our content, as
well as the trademark for the brand or title
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