Zynga 2015 Annual Report Download - page 24

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Table of Contents
and maintain elements of this system, but significant elements of this system are operated by third-parties that we do not control and which would require
significant time to replace. We expect this dependence on third-parties to continue. In particular, a significant portion of our game traffic, data storage, data
processing and other computing services is hosted by AWS. As of December 31, 2015, AWS hosted almost all of our game traffic and computing systems. AWS
provides us with computing and storage capacity pursuant to an agreement that continues until terminated by either party. AWS may terminate the agreement
without cause by providing 180 days prior written notice, and may terminate the agreement with 30 days prior written notice for cause, including any material
default or breach of the agreement by us that we do not cure within the 30 day period. The agreement requires AWS to provide us their standard computing and
storage capacity and related support in exchange for timely payment by us. We have experienced, and may in the future experience, disruptions, outages and other
performance problems due to a variety of factors, including infrastructure changes, human or software errors and capacity constraints. 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. Any failure, disruption or interference with our use of hosted cloud computing services provided by third-parties, like AWS,
could impact our operations, and our business could be adversely impacted.
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:
• 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.
These enhancements and improvements will require capital expenditures and allocation of valuable management and employee resources.
OuracquisitionofNaturalMotionwas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 is still
continuing and 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:
• the potential lack of employee retention;
• that NaturalMotion’s games may not succeed or perform as we anticipated;
• that NaturalMotion’s pipeline of future products under development, including Dawn of Titans and CSR Racing 2 , have and may continue to take
longer than predicted to develop and launch or may fail to launch at all. For example, we recently announced that the previously anticipated 2015
launches of Dawn of Titans and CSR Racing 2 are being moved to 2016;
• the difficulty of integrating our and NaturalMotion’s tools and technology into each other’s current and future mobile products; and
• the risk that the implementation of our existing models and mechanics fails to enhance NaturalMotion’s products.
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