Zynga 2014 Annual Report Download - page 39

Table of Contents
are not planning to seek any direct licenses in Nevada or other jurisdictions in the U.S., our partnership with bwin.party in the United Kingdom
continues as we evaluate its results.
It is difficult to predict how existing laws will be applied to our business and the new laws to which we may become subject. If we are not
able to comply with these laws or regulations or if we become liable under these laws or regulations, we could be directly harmed, and we may
be forced to implement new measures to reduce our exposure to this liability. This may require us to expend substantial resources or to modify
our games, which would harm our business, financial condition and results of operations. In addition, the increased attention focused upon
liability issues as a result of lawsuits and legislative proposals could harm our reputation or otherwise impact the growth of our business. Any
costs incurred as a result of this potential liability could harm our business and operating results.
It is possible that a number of laws and regulations may be adopted or construed to apply to us in the United States and elsewhere that
could restrict the online and mobile industries, including player privacy, advertising, taxation, content suitability, copyright, distribution and
antitrust. Furthermore, the growth and development of electronic commerce and virtual goods may prompt calls for more stringent consumer
protection laws that may impose additional burdens on companies such as ours conducting business through the Internet and mobile devices. We
anticipate that scrutiny and regulation of our industry will increase and we will be required to devote legal and other resources to addressing such
regulation. For example, existing laws or new laws regarding the marketing of in-app purchases, labeling of free-to-play games, regulation of
currency and banking institutions unclaimed property and money transmission may be interpreted to cover our games and the virtual currency,
goods or payments that we receive. If that were to occur we may be required to seek licenses, authorizations or approvals from relevant
regulators, the granting of which may be dependent on us meeting certain capital and other requirements and we may be subject to additional
regulation and oversight, all of which could significantly increase our operating costs. Changes in current laws or regulations or the imposition
of new laws and regulations in the United States or elsewhere regarding these activities may lessen the growth of social game services and
impair our business. In addition, some concern has been expressed in Europe and in certain countries that social gaming should be regulated to
protect consumers, in particular minors and persons susceptible to addiction to social games. This concern could lead to the adoption of
legislation or regulations that may impose additional burdens upon us, prohibit the offering of our games to certain users or territories, increase
our costs or require changes to our games.
Our prospects may suffer if our network is unsuccessful.
We aspire to expand our network to leverage our existing and new games to bring the best social playing experiences to our audience and
further broaden to other games to ultimately create the best experience for play that includes mobile and web players. If our network fails to
engage players or attract advertisers, we may fail to generate sufficient revenue or bookings to justify our investment in the development and
operation of our network. We may also encounter technical and operational challenges operating a network.
We are subject to the terms of service of third party social networks and platforms such as Facebook, Apple and Google, where our games
are distributed, which may limit our ability to operate or promote our network. For example, under the current terms of service with Facebook,
we are limited in our ability to use a Facebook users friends list and Facebook’s communication channels to promote our network. This may
limit our ability to reach Facebook users from our network and may limit the number of players that use our network.
Companies and governmental agencies may restrict access to Facebook, our website, mobile applications or the Internet generally, which
could lead to the loss or slower growth of our player base.
Our players generally need to access the Internet and in particular Facebook and our website to play our games. Companies and
governmental agencies could block access to Facebook, our website, mobile applications or the Internet generally for a number of reasons such
as security or confidentiality concerns or regulatory
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