Zynga 2014 Annual Report Download - page 24

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Table of Contents
experienced, and may in the future experience, service disruptions, outages and other performance problems due to a variety of factors, including
infrastructure changes, human or software errors and capacity constraints. For example, the operation of CityVille was interrupted for several
hours in April 2011 and the operation of most of our games was interrupted for several hours in January 2013, in each case due to network
outages. If a particular game is unavailable when players attempt to access it or navigation through a game is slower than they expect, players
may stop playing the game and may be less likely to return to the game as often, if at all. A failure or significant interruption in our game service
would harm our reputation and operations. We have suffered interruptions in service when releasing new software versions or bug fixes for
specific games in the past and if any such interruption were significant it could harm our business or reputation. We expect to continue to make
significant investments to our technology infrastructure to maintain and improve all aspects of player experience and game performance. To the
extent we do not effectively address capacity constraints, upgrade our systems as needed and continually develop our technology and network
architecture to accommodate increasing traffic, our business and operating results may suffer. We do not maintain insurance policies covering
losses relating to our systems and we do not have business interruption insurance. Furthermore, our disaster recovery systems and those of third-
parties with which we do business may not function as intended or may fail to adequately protect our critical business information in the event of
a significant business interruption, which may cause interruption in service of our games, security breaches or the loss of data or functionality,
leading to a negative effect on our business.
We must continue to spend significant resources to effectively manage our business and operations.
To effectively manage our business and operations, we will need to continue to focus on spending significant resources to improve our
technology infrastructure, our operational, financial and management controls, and our reporting systems and procedures by, among other things:
These enhancements and improvements will require capital expenditures and allocation of valuable management and employee resources.
Our acquisition of NaturalMotion is significant, and the anticipated benefits of the acquisition could be impacted by a number of risks
specific to NaturalMotion
’s business, as well as by risks related to the integration process.
On February 11, 2014, we completed our acquisition of NaturalMotion. The process of integrating NaturalMotion’s operations into our
operations could result in unforeseen operating difficulties, absorb significant management attention, and require significant resources that would
otherwise have been available for the ongoing development of our existing operations. If we are unsuccessful in addressing these risks and
challenges, our business and prospects would be harmed. Particular significant risks and challenges include, but are not limited to:
21
•
monitoring and updating our technology infrastructure to maintain high performance and minimize down time;
•
enhancing information and communication systems to ensure that our employees and offices around the world are well-coordinated
and can effectively communicate with each other; and
•
monitoring our internal controls to ensure timely and accurate reporting of all of our operations.
•
the potential lack of employee retention stemming from the acquisition;
•
that NaturalMotion
’
s games may not succeed or perform as we anticipated;
•
that NaturalMotion’s pipeline of future products under development may take longer than predicted to develop and launch or may
fail to launch at all;
•
the difficulty of integrating NaturalMotion
’
s tools and technology into our current and future mobile products; and
•
the risk that the implementation of our existing models and mechanics fails to enhance NaturalMotion
’
s products.