Zynga 2014 Annual Report Download - page 33

Table of Contents
If we are unable to manage the complexity of our global operations successfully, our business, financial condition and operating results
could be adversely affected. Additionally, our ability to successfully gain market acceptance in any particular market is uncertain, and the
distraction of our senior management team could harm our business.
Our existing and potential players may be attracted to competing forms of entertainment such as offline and traditional online games,
television, movies and sports, as well as other entertainment options on the Internet.
Our players face a vast array of entertainment choices. Other forms of entertainment, such as offline, traditional online, personal computer
and console games, television, movies, sports, RMG and the Internet, are much larger and more well-established markets and may be perceived
by our players to offer greater variety, affordability, interactivity and enjoyment. These other forms of entertainment compete for the
discretionary time and income of our players. If we are unable to sustain sufficient interest in our games in comparison to other forms of
entertainment, including new forms of entertainment, our business model may no longer be viable.
Competition in our industry is intense and there are low barriers to entry.
Our industry is highly competitive and we expect more companies to enter the sector and a wider range of social games to be introduced.
Our competitors that develop games for networks, on both web and mobile, vary in size and include companies such as DeNA Co. Ltd. (Japan),
Electronic Arts Inc., Gameloft SA, GREE International, Inc., Glu Mobile Inc., King.com Inc., Rovio Mobile Ltd., Supercell Inc., GungHo
Online Entertainment, Inc., Kabam and The Walt Disney Company. In addition, online game developers and distributors who are primarily
focused on specific international markets, such as Tencent Holdings Limited in Asia, and high-profile companies with significant online
presences that to date have not developed social games, such as Facebook, Apple Inc., Google Inc. and Microsoft Corporation, may decide to
develop social games. Some of these current and potential competitors have significant resources for developing or acquiring additional games,
may be able to incorporate their own strong brands and assets into their games, have a more diversified set of
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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;
• compliance with applicable foreign laws and regulations, including privacy laws and laws relating to content and consumer
protection (For example, the United Kingdom’s Office of Fair Trading issued new principles in January 2014 relating to in-app
purchases in free
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to
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play games that are directed toward children 16 and under, which principles became effective in April 2014);
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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;
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currency exchange rate fluctuations;
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protectionist laws and business practices that favor local businesses in some countries;
• double taxation of our international earnings and potentially adverse tax consequences due to changes in the tax laws of the United
States or the foreign jurisdictions in which we operate;
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political, economic and social instability;
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higher costs associated with doing business internationally;
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export or import regulations; and
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trade and tariff restrictions.