Zynga 2014 Annual Report Download - page 31

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Table of Contents
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. For example, in September 2014, we released a new version of our poker offering that was intended to reimagine the
game with an entirely new experience for mobile and replace the original game for mobile applications. Due to playability issues, some players
playing on older devices reported that they were not having a smooth and seamless experience and that they preferred the classic design and play
style of the original game. This resulted in us both having to address the issues impacting Zynga Poker so that it would offer a more optimal
player experience and re-launch Zynga Poker Classic,
which offers familiar gameplay that stays true to our traditional poker experience. To have
more successful game launches in the future, we will need to hire and retain engineers with the expertise to develop games and game updates on
mobile platforms, better anticipate technical and operational issues in connection with a launch so that they can be addressed prior to launch and
stay true to our consumer-centric approach to decision making to offer optimal player experiences. If we are unsuccessful in any of these
endeavors, or are otherwise unable to keep up with rapidly changing technology, to offer new games and game updates that appeal to our player
base or to monetize our mobile games, our business will suffer.
If the use of mobile devices as game platforms and the proliferation of mobile devices generally do not increase, our business could be
adversely affected.
We have shifted our business to focus on mobile first games over the last year. The number of people using mobile Internet-enabled
devices has increased dramatically in the past few years and we expect that this trend will continue. However, the mobile market, particularly the
market for mobile games is still emerging and it may not grow as we anticipate. Our future success is substantially dependent upon the continued
growth of the market for mobile games. The mobile market may not continue to grow at historic rates and consumers may not continue to use
mobile-Internet enabled devices as a platform for games. In addition, we do not currently offer our games on all mobile devices. If the mobile
devices on which our games are available decline in popularity we could experience a decline in bookings and revenue. Any decline in the
growth of the mobile market or in the use of mobile devices for games could harm our business.
We have a new business model and a short operating history, which make 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 make 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 Digital Entertainment plc (“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 real money
gaming (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 provide assurance that our RMG products, or any products or partnerships we may
launch in the future will be successful, or ultimately produce any material revenue.
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