Zynga 2015 Annual Report Download - page 20

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Table of Contents
Facebook recently introduced a new version of its developer platform that required us to migrate our games to that platform. We have made the decision not
to migrate multiple games to the new platform, which impacted our players ability to access those games through Facebook and web based bookings and revenue in
2015 and is expected to continue to impact our web based bookings and revenue in 2016. If we are unable to develop new games or features that work with this
platform our players may not be able to access those games or features or otherwise encounter a negative gaming experience, resulting in reduced bookings and
revenue. In addition, the new platform and any future changes to it may change the way our developers can interact with users or how Facebook users can share
information with friends. Any such changes in the future could significantly alter how players experience or interact within our games, which may harm our
business.
If we violate, or if Facebook believes we have violated its terms of service, it could limit or discontinue our access to the platform, which would harm our
business.
We also rely on the continued functionality of the Facebook platform. If our players or potential players are not able to access our games through this
platform or encounter difficulties in doing so, we may lose players, resulting in decreased bookings and revenue. The level of service provided by Facebook may
also impact the purchase, usage and satisfaction with the virtual goods or currency purchased by our players, adversely affecting our business and profitability. If
Facebook experiences interruptions in service or issues with its in-app purchasing functionality regularly or for a prolonged basis, or other similar issues arise that
impact our ability to generate revenues on the Facebook platform, it could have a negative impact on our revenues and operating results.
Tobesuccessful,wemustincreasinglyleveragetheglobalconnectivityanddistributionofmobileplatforms,makingthesuccessofourbusinessdependenton
thistechnologyandourrelationshipswithmobileplatformproviders,whichinmanycaseshavetheunilateralabilitytointerprettheirpoliciesandtermsand
conditionsforapplicationsanddevelopers.*
Our social games increasingly leverage the global connectivity and distribution of mobile platforms including Apple’s App Store for iOS devices and the
Google Play App Store for Android devices. Our games are distributed on these platforms and the virtual items we sell in our games are purchased using the
payment processing systems of these platform providers. In the fourth quarter of 2015, 73% of our bookings were generated through mobile platforms. We are
subject to the standard policies and terms of service of these third party platforms, which govern the promotion, distribution and operation of games on the platform
and can be changed by the platform providers, in their sole discretion, at any time. Such changes may decrease the visibility or availability of our games, limit our
distribution capabilities, prevent access to our existing games, reduce the amount of bookings and revenue we may recognize from in-game purchases, increase our
costs to operate on these platforms or result in the exclusion or limitation of our games on such third party platforms. Any such changes could significantly harm
our business in both the short-term and long-term.
For example, Apple recently changed its policy and required apps available through the Apple App Store to provide 64-bit support and be built with the iOS
8 software development kit, with certain exceptions. This policy change required us to adapt our games to support 64-bit and be built with the iOS 8 software
development kit, which involved significant development, time, and expense. In addition, due to the significant expense involved in supporting 64-bit development,
we might decide not to continue updating certain of our existing games that we otherwise would have continued to update, which would cause the revenues we
generate from those games to decline more quickly than they otherwise would have. Furthermore, building our games to support 64-bit development will increase
the file size of our games, which could reduce the number of downloads of these games, particularly if we are unable to keep the size of the games below 100
megabytes, which is the maximum file size that can currently be downloaded over any carrier’s wireless network.
If we violate, or a platform provider believes we have violated its terms of service, it could limit or discontinue our access to the platform, which would harm
our business.
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