Zynga 2015 Annual Report Download - page 7

Table of Contents
PART I
ITEM 1. BUSINESS
Overview
Zynga Inc. (“Zynga” or “we” or “the Company”) is a leading provider of social game services. We develop, market and operate social games as live services
played on mobile platforms such as iOS and Android and social networking sites such as Facebook. Generally, all of our games are free to play, and we generate
revenue through the in-game sale of virtual goods and advertising services.
We are a pioneer and innovator of social games and a leader in making “play” a core activity on mobile devices and social networking sites. We believe our
leadership position in social games is the result of our significant investment in our people, content, brand, technology and infrastructure. Our leadership position in
social games is defined by the following:
• EngagedandGlobalCommunityofPlayers.According to our analytics, during the fourth quarter of 2015, we had 68 million monthly active users or
MAUs, of which 81% were mobile MAUs, and 18 million daily active users or DAUs, of which 82% were mobile DAUs. Our players are also highly
engaged with our games being played by 21 million DAUs worldwide for the full year ended 2015, of which 80% were mobile DAUs. According to
comScore Mobile Metrix, as of December 2015, Zynga is ranked number 1 in mobile applications in the United States for monthly unique users in the
games category.
• LeadingPortfolioofSocialGames.We have developed a number of popular social games including games in our Slots, Words With Friends , Zynga
Poker and FarmVille franchises.
• ScalableTechnologyandData.We leverage our technology to increase player engagement, cross-promote our portfolio of games, continually
enhance existing games, launch new games and build the Zynga brand. We believe our scale results in network effects that deliver compelling value to
our players, and we are committed to making significant investments to grow our community of players, their engagement and monetization over time.
We believe that combining data analytics with creative game design enables us to create a superior player experience.
In 2015, we launched several new games on mobile and web including Words on Tour , Empires & Allies , FarmVille: Harvest Swap , Mountain Goat
Mountain , Black Diamond Casino and Princess Bride Slots . In May 2015, we entered the mobile Action Strategy category with Empires & Allies and were listed
among the “2015 Best New Games” awarded by Google Play and “2015 Best Mobile Games” awarded by Facebook. Words with Friends also earned “Best Free
Game of 2015” by Apple and was localized in six global languages. Inclusion in these rankings demonstrates our commitment to developing high quality mobile
social games. In the third quarter of 2015, we also acquired Rising Tide Games to expand our footprint in the social casino games space.
Consistent with our free-to-play business model, a small portion of our players have historically been payers. During the three months ended December 31,
2015, we had approximately 0.8 million monthly unique payers or MUPs (excluding payers who use certain payment methods for which unique payer data is not
available, NaturalMotion legacy games and games from recently acquired Rising Tide). Because the opportunity for social interactions increases as the number of
players increases, we believe that maintaining and growing our overall number of players, including the number of players who may not purchase virtual goods, is
important to the success of our business. As a result, we believe that the number of players who choose to purchase virtual goods will continue to constitute a small
portion of our overall players.
Our top three games historically have contributed the majority of our revenue. Our top three games accounted for 53%, 60% and 54% of our online game
revenue in 2015, 2014 and 2013, respectively.
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