Zynga 2015 Annual Report Download - page 31

Table of Contents
to use mobile-Internet enabled devices as a platform for games. In addition, we do not currently offer our games on all mobile devices. If the mobile devices on
which our games are available decline in popularity we could experience a decline in bookings and revenue. Any decline in the growth of the mobile market or in
the use of mobile devices for games could harm our business.
Wehaveanewbusinessmodelandashortoperatinghistory,whichmakeitdifficulttoevaluateourprospectsandfuturefinancialresultsandmayincrease
theriskthatwewillnotbesuccessful.
We began operations in April 2007, and became publicly listed in December 2011, and we have a short operating history and a new business model, which
make it difficult to effectively assess our future prospects. Our business model is based on offering games that are free to play. To date, only a small portion of our
players pay for our products. We cannot assure that any of our efforts will be successful or result in the development or timely launch of additional products, or
ultimately produce any material revenue.
Wearenotparticipatingintherealmoneygamingmarketatthistimeand,ifweelecttoparticipateinthismarket,oureffortsmaynotbesuccessful.*
We are not currently participating in global RMG markets. We may evaluate from time to time possible participation in global RMG markets. If we elect to
participate in global regulated markets, gaming laws may require us, each of our subsidiaries engaged in gaming operations, certain of our directors, officers and
employees, and in some cases, our stockholders, to obtain licenses or findings of suitability from gaming authorities. Gaming authorities have very broad discretion
in determining whether an applicant qualifies for a license or should be deemed suitable. If we are required to obtain a license to participate in a global RMG
market, we cannot provide assurance that we will be able to obtain a license in a timely fashion or at all.
In addition, regulatory and legislative developments, including excessive taxation, may prevent or significantly limit our ability, or the ability of any entity
with which we may partner in the future, to enter into or succeed in RMG. Becoming familiar with and complying with these requirements will increase our costs
and subject our business to greater scrutiny by regulators in many different jurisdictions. If our brand becomes associated with RMG we may lose current players,
advertisers or partners or have difficulty attracting new players, advertisers or partners, which could adversely impact our business.
Ourinternationaloperationsaresubjecttoincreasedchallengesandrisks.
Continuing to expand our business to attract players in countries other than the United States is a critical element of our business strategy. An important part
of targeting international markets is developing offerings that are localized and customized for the players in those markets. We have a limited operating history as
a company outside of the United States. We expect to continue to expand our international operations in the future by expanding our offerings in new languages.
Our ability to expand our business and to attract talented employees and players in an increasing number of international markets will require considerable
management attention and resources and is subject to the particular challenges of supporting a rapidly growing business in an environment of multiple languages,
cultures, customs, legal systems, alternative dispute systems, regulatory systems and commercial infrastructures. We have experienced difficulties in the past and
have not been successful in all the countries we have entered. For example, we recently announced that we closed our office in Beijing, China because its recent
game launches and product localization initiatives did not meet expectations. We may not be able to offer our games in certain countries. Expanding our
international focus may subject us to risks that we have not faced before or increase risks that we currently face, including risks associated with:
• recruiting and retaining talented and capable management and employees in foreign countries;
• challenges caused by distance, language and cultural differences;
• developing and customizing games and other offerings that appeal to the tastes and preferences of players in international markets;
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