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• legal or regulatory restrictions or proceedings could adversely impact our business and limit the growth of our operations;
+Added: • the impact of an economic recession or periods of increased inflation, and any reductions to household spending on the types of discretionary entertainment we offer;
• our international operations and ownership, including our significant operations in Israel, Ukraine and Belarus and the fact that our controlling stockholder is a Chinese-owned company;
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For example, in the past, some of these platform providers have been unavailable for short periods of time, unexpectedly changed their terms or conditions, or experienced issues with their features that permit our players to purchase virtual items.
−Removed: Additionally, we rely on three separate third-party online payment service providers to process any payments generated on games accessed and operated on our own Direct-to-Consumer platforms.
+Added: Additionally, we rely on two separate third-party online payment service providers to process any payments generated on games accessed and operated on our own Direct-to-Consumer platforms.
If any of these third-party service providers is unable to process payments, even for a short period of time, our business would be harmed.
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In addition, if we do not adhere to the terms and conditions of our platform providers, the platform providers may take actions to limit the operations of, suspend or remove our games from the platform, and/or we may be exposed to liability or litigation.
−Removed: For example, in August 2020, Epic Games, Inc., or Epic Games, attempted to bypass Apple and Google’s payment systems for in-game purchases with an update that allowed users to make purchases directly through Epic Games in its game, Fortnite.
+Added: For example, in August 2020, Epic Games, Inc., or Epic Games, attempted to bypass Apple and Google’s payment systems for in-game purchases with an update that allowed users to make purchases directly through Epic
+Added: Games in its game, Fortnite.
Apple and Google promptly removed Fortnite from their respective app stores, and Apple filed a lawsuit seeking injunctive relief to block the use of Epic Games’ payment system and seeking monetary damages to recover funds made while the updated version of Fortnite was active.
Apple was awarded the monetary damages to recover these funds, although the case is under appeal as of the date of this annual report.
−Removed: If any such events described above occur on a short-term or long-term basis, or if these third-party platforms and online payment service providers otherwise experience issues that impact the ability of players to download or access our games,
−Removed: access social features, or make in-game purchases, it would have a material adverse effect on our brands and reputation, as well as our business, financial condition and results of operations.
+Added: If any such events described above occur on a short-term or long-term basis, or if these third-party platforms and online payment service providers otherwise experience issues that impact the ability of players to download or access our games, access social features, or make in-game purchases, it would have a material adverse effect on our brands and reputation, as well as our business, financial condition and results of operations.
A limited number of games have generated a majority of our revenues, and we may be unable to offset any declines in revenues from our top games.
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For example, for the years ended December 31, 2022 and 2021, our top two games by revenue, Slotomania and Bingo Blitz , collectively generated approximately half of our revenues for each period.
−Removed: For a game to remain popular and to retain players, we must constantly enhance, expand and upgrade the game with new features, offers, and content that players find attractive.
−Removed: As a result, each of our games requires significant product development, marketing and other resources to develop, launch and sustain popularity through regular upgrades, expansions and new content, and such costs on average have increased over time.
+Added: For a game to remain popular and to retain players, we must effectively enhance, expand and upgrade the game with new features, offers, and content that players find attractive.
+Added: We may not be successful in these efforts, including not providing enough new features, offers and content or providing too many new features, offers and content.
+Added: Each of our games requires significant product development, marketing and other resources to develop, launch and sustain popularity through regular upgrades, expansions and new content, and such costs on average have increased over time.
Even with these investments, we may experience sudden declines in the popularity of any of our games and fluctuations in the number of daily average users and monthly average users.
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• our ability to continually anticipate and respond to changing user interests and preferences generally and to changes in the gaming industry;
+Added: • our ability to introduce effective amounts of new content to our players;
• our ability to compete successfully against a large and growing number of industry participants with essentially no barriers to entry;
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Our games are available to players for free, and we generate nearly all of our revenues from the sale of virtual items when players make voluntary in-game purchases.
−Removed: For example, in each of the years ended December 31, 2021 and 2020, we derived 97.1% of our revenues from in-game purchases.
+Added: For example, in each of the years ended December 31, 2022 and 2021, we derived 97.9% and 97.1% of our revenues from in-game purchases, respectively.
Paying users usually spend money in our games because of the perceived value of the virtual items that we offer for purchase.
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Our inability to make acquisitions and integrate any acquired businesses successfully could limit our growth or disrupt our plans and operations.
−Removed: Historically, a significant portion of our growth has been as a result of our acquisition of complementary studios and games, rather than in-house development, including our acquisition of Wooga GmbH, or Wooga, in 2018, Supertreat GmbH, or Supertreat, in 2019, Seriously Holding Corp., or Seriously, in 2019, and Reworks Oy, or Reworks, in 2021.
−Removed: and we anticipate that acquisitions will continue to be an important source of growth in the near future.
+Added: Historically, a significant portion of our growth has been as a result of our acquisition of complementary studios and games, rather than in-house development, including our acquisition of Wooga GmbH, or Wooga, in 2018, Supertreat GmbH, or Supertreat, in 2019, Seriously Holding Corp., or Seriously, in 2019, and Reworks Oy, or Reworks, in 2021, and JustPlay.LOL, or JustPlay, in 2022, and we anticipate that acquisitions will continue to be an important source of growth in the near future.
Our ability to succeed in implementing our strategy will depend to some degree upon our ability to identify quality games, applications and businesses and complete commercially viable acquisitions.
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• failure to identify acquisition, investment or other strategic alliance opportunities that we deem suitable or available on favorable terms;
−Removed: • problems integrating acquired businesses, technologies or products, including issues maintaining uniform standards, procedures, controls and policies;
+Added: • problems integrating acquired businesses, technologies or products, including issues maintaining uniform standards, procedures, controls and policies, or applying Boost to our new games;
• unsuccessful efforts to expand and unanticipated challenges in entering into new categories of games and applications, including design entertainment and home design;
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In March 2021, we issued $600.0 million aggregate principal amount of our 4.250% senior notes due 2029 (our “Notes”) in a private offering pursuant to an indenture dated March 11, 2021 (the “Indenture”).
−Removed: As of December 31, 2021, we had $2,485.8 million aggregate principal amount of outstanding indebtedness, in addition to $600.0 million available for borrowing under our Revolving Credit Facility at that date.
−Removed: For the year ended December 31, 2021, we made net principal payments of $489.2 million and paid $93.9 million for interest.
+Added: of December 31, 2022, we had $2,466.8 million aggregate principal amount of outstanding indebtedness, in addition to $600.0 million available for borrowing under our Revolving Credit Facility at that date.
+Added: For the year ended December 31, 2022, we made net principal payments of $19.0 million and paid $107.5 million for interest (net of hedges).
Our indebtedness also may include senior secured credit facilities if drawn upon, which we refer to herein as the Credit Facilities, consisting of a $600 million senior secured revolving credit facility, which we refer to herein as the Revolving Credit Facility, and a $1,900 million senior secured first lien term loan, which we refer to herein as the Term Loan.
−Removed: The Credit Facilities were provided pursuant to a credit agreement, which we refer to herein as the Credit Agreement, dated as of December 10, 2019, by and among us, the lenders party thereto and Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent, and the other parties thereto, as amended.
+Added: The Credit Facilities were provided pursuant to a credit agreement, which we refer to herein as the Credit Agreement, dated as of December 10, 2019 and amended on March 11, 2021, by and among us, the lenders party thereto and Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent, and the other parties thereto, as amended.
Our substantial indebtedness could have important consequences for us, including, but not limited to, the following:
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We may be able to incur substantial additional indebtedness in the future, subject to the restrictions contained in the Credit Agreement and the Indenture.
−Removed: If new indebtedness is added to our current debt levels, the related risks described above could intensify.
+Added: If new indebtedness is added to our current debt levels, the related risks described above could
Additionally, the Term Loan matures in March 2028, the Revolving Credit Facility matures in March 2026 and the Notes mature in March 2029.
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If such refinancing indebtedness is not available at interest rates comparable to our existing indebtedness our interest expense could materially increase, which would have a negative impact on our results of operations.
−Removed: If we cannot timely refinance our indebtedness,
−Removed: we may have to take actions such as issuing additional equity and reducing, delaying or foregoing capital expenditures, strategic acquisitions and investments.
+Added: If we cannot timely refinance our indebtedness, we may have to take actions such as issuing additional equity and reducing, delaying or foregoing capital expenditures, strategic acquisitions and investments.
We cannot assure you that any such actions, if necessary, could be implemented on commercially reasonable terms or at all.
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While the vast majority of our revenues are generated by in-game purchases, a growing portion of our revenues are generated from the sale of in-game advertisements.
−Removed: For example, in each of the years ended December 31, 2021 and 2020, we derived 2.9% of our revenues from in-game advertising.
+Added: For example, in each of the years ended December 31, 2022 and 2021, we derived 2.1% and 2.9% of our revenues from in-game advertising, respectively.
If we are unable to attract and maintain a sufficient player base or otherwise fail to offer attractive in-game advertising models, advertisers may not be interested in purchasing such advertisements in our games, which could adversely affect our revenues from in-game advertising.
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If new games do not grow or generate sufficient additional revenues to offset any declines in purchases from our other games, our revenues could be materially and adversely affected.
−Removed: For example, on October 11, 2021, we announced the global launch of our new game Switchcraft, which may have the effect of diverting players of our other games and may not generate sufficient additional revenues to offset any decline in purchases from our other games.
Yuzhu Shi controls us through his indirect interest in Playtika Holding UK II Limited and its ownership of our common stock will prevent you and other stockholders from influencing significant decisions.
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Ltd., or Giant, a publicly traded company on the Shenzhen Stock Exchange, to be transferred beneficial ownership of certain shares of ours currently owned by Mr.
−Removed: Shi and his affiliates, the result of which would have been that Giant would control the voting power of the shares of our common stock and would permit Giant to consolidate us for accounting purposes.
+Added: and his affiliates, the result of which would have been that Giant would control the voting power of the shares of our common stock and would permit Giant to consolidate us for accounting purposes.
Had that transaction been consummated, Giant informed us that they would have been required to obtain the approval of its board of directors for substantially all potential acquisitions by it or its consolidated subsidiaries, including acquisitions by us, and, in certain cases, approval from Giant’s stockholders, which could have created potential conflicts between Yuzhu Shi’s affiliates and us on our acquisition strategies.
Further, Giant informed us that had the transaction been consummated, substantially all derivative transactions and other extraordinary transactions undertaken by Playtika would need to be approved by Giant’s board of directors.
−Removed: transaction was abandoned, Mr.
+Added: While that transaction was abandoned, Mr.
Shi and his affiliates may, in his and their discretion, seek to consummate similar transactions in the future, and we would not be able to prevent such transactions from being consummated.
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The player will always receive one or more virtual items when he or she opens the loot box.
−Removed: In the event that Apple, Google, or any of our other platform providers changes its developer terms of service to include more onerous requirements or if any of our platform providers were to prohibit the use of loot boxes in games distributed on its digital platform, we would be required to redesign the economies of the affected games in order to continue distribution on the impacted platforms, which would likely cause a decline in the revenues generated from these games and require us to incur additional costs.
+Added: Each of Apple, Google and Facebook are defendants in class action lawsuits alleging, among other things, that social casino games offered through their respective platforms constitute illegal gambling and in addition to seeking monetary damages, the plaintiffs are also seeking that the platforms remove access to the social casino games.
+Added: In the event that Apple, Google, Facebook or any of our other platform providers changes its developer terms of service to include more onerous requirements or if any of our platform providers were to prohibit the use of loot boxes in games distributed on its digital platform, we would be required to redesign the economies of the affected games in order to continue distribution on the impacted platforms, which would likely cause a decline in the revenues generated from these games and require us to incur additional costs.
In addition, there are numerous ongoing academic, political and regulatory discussions in the United States, Europe, Australia and other jurisdictions regarding whether certain game mechanics, such as loot boxes, should be subject to a higher level or different type of regulation than other game genres or mechanics to protect consumers, in particular minors and persons susceptible to addiction, and, if so, what such regulation should include.
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Senate that would regulate loot boxes in games marketed toward players under the age of 18.
−Removed: The United Kingdom’s Department for Digital, Culture, Media and Sport launched a call for evidence in September 2020 into the impact of loot boxes on in-game spending and gambling-like behavior in connection with the UK government’s review of the 2005 Gambling Act (the principal gambling regulation in the United Kingdom), and politicians have cited loot boxes as an example of recent technology innovation where government
−Removed: regulation is needed.
−Removed: A conclusion to the call for evidence has not yet been released.
+Added: The United Kingdom’s Department for Digital, Culture, Media and Sport launched a call for evidence in September 2020 into the impact of loot boxes on in-game spending and gambling-like behavior in connection with the UK government’s review of the 2005 Gambling Act (the principal gambling regulation in the United Kingdom), and politicians have cited loot boxes as an example of recent technology innovation where government regulation is needed.
+Added: In July 2022, the UK government issued a conclusion to the call for evidence and while it did not call for paid loot boxes to be deemed gambling, it called for companies within the industry to engage in self-regulation, including taking actions to protect children and their ability to access and purchase loot boxes.
In October 2020, a Netherlands district administrative court upheld an administrative order by the Dutch gambling authority demanding that Electronic Arts remove certain loots boxes from one of its games because they violated Dutch gambling laws and recommended a maximum fine of 10 million euros for non-compliance with the administrative order.
For the first time, the Dutch district administrative court ruled that virtual items can constitute a prize for purposes of gambling legislation.
+Added: However, in March 2022, the highest administrative court in the Netherlands decided a final appeal in Electronic Arts’ favor and determined that the loot boxes in its FIFA games do not contravene Dutch gambling law.
It is possible that other courts or regulatory agencies could adopt similarly broad definitions of prize.
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such laws and regulations are continually evolving.
−Removed: Our or our platform and service providers’ actual or perceived failure to comply with these laws and regulations could harm our business.”
+Added: Our platform and service providers’ actual or perceived failure to comply with these laws and regulations could harm our business.”
In some of our games, certain mechanics may be deemed to be loot boxes.
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Court of Appeals for the Ninth Circuit decided that a social casino game produced by one of our competitors should be considered illegal gambling under Washington state law.
−Removed: Similar lawsuits have been filed against other defendants, including us.
−Removed: For example, in April 2018, a putative class action lawsuit was filed in federal district court alleging
−Removed: substantially the same causes of action against our social casino games.
+Added: Similar lawsuits and arbitration proceedings have been filed against other defendants, including us.
+Added: For example, in April 2018, a putative class action lawsuit was filed in federal district court alleging substantially the same causes of action against our social casino games.
+Added: In August 2020, we entered into a settlement agreement to settle this matter, which was approved by the court in February 2021.
+Added: In addition, on May 17, 2022, Guy David Ben Yosef filed a motion for approval of a class action lawsuit in district court in Tel Aviv-Jaffa Israel against Playtika Group Israel Ltd.
+Added: (“PGI”), on behalf of all of PGI’s customers who made game token purchases in Israel as part of games marketed by PGI during the seven years preceding the filing of the motion and for all subsequent customers of such games who purchase tokens until the resolution of the claim.
+Added: The motion alleges that certain of the Company’s slot, poker and solitaire-themed games, including Slotomania, Caesars Slots, Solitaire Grand Harvest, House of Fun and Poker Heat, constitute illegal gambling and are prohibited under Israeli law and are misleading under Israeli consumer protection laws and alleges unjust enrichment.
+Added: The motion asserts damages of NIS 50 million.
+Added: In addition, we received seven demands for arbitration in late 2022 and early 2023 alleging that our games constitute illegal gambling under applicable state law.
See “—Legal proceedings may materially adversely affect our business and our results of operations, cash flows and financial condition” and “Business—Legal Proceedings.”
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(ii) methods to limit the ability of children to make in-game purchases, and (iii) a concern that mobile game companies are using big data and advanced technology to predict and target “vulnerable” users who may spend significant time and money on mobile games in lieu of other activities.
+Added: This has resulted in governmental action against another gaming company.
+Added: In December 2022, Epic Games and the U.S.
+Added: Federal Trade Commission, or the FTC, announced a settlement, in
+Added: which Epic Games agreed to pay a $245 million to the FTC relating to in-game purchases in Epic Game’s popular Fortnite game.
Such concerns could lead to increased scrutiny over the manner in which our games are designed, developed, distributed and presented.
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In August 2020, we entered into a settlement agreement, which was approved by the court in February 2021, to settle the Sean Wilson litigation.
+Added: In addition, on May 17, 2022, Guy David Ben Yosef filed a motion for approval of a class action lawsuit in district court in Tel Aviv-Jaffa Israel against Playtika Group Israel Ltd.
+Added: (“PGI”), on behalf of all of PGI’s customers who made game token purchases in Israel as part of games marketed by PGI during the seven years preceding the filing of the motion and for all subsequent customers of such games who purchase tokens until the resolution of the claim.
+Added: The motion alleges that certain of the Company’s slot, poker and solitaire-themed games, including Slotomania, Caesars Slots, Solitaire Grand Harvest, House of Fun and Poker Heat, constitute illegal gambling and are prohibited under Israeli law and are misleading under Israeli consumer protection laws and alleges unjust enrichment.
+Added: The motion asserts damages of NIS 50 million.
+Added: In addition, we received seven demands for arbitration in late 2022 and early 2023 alleging that our games constitute illegal gambling under applicable state law.
In December 2016, both a trademark infringement lawsuit was filed in Canadian court by Enigmatus, s.r.o.
against Playtika Ltd., our subsidiary, and CIE regarding our use of the Slotomania trademarks, and a copyright lawsuit was filed against Wooga in a German court by a former freelance writer for additional remuneration.
−Removed: In October 2020, a patent infringement claim, NEXRF Corp.
−Removed: Playtika Ltd., Playtika Holding Corp.
−Removed: and Caesars Interactive Entertainment LLC , was filed against Playtika Holding Corp., Playtika Ltd., our subsidiary, and CIE in U.S.
−Removed: District Court, District of Nevada.
−Removed: The plaintiff alleges that we and CIE are infringing certain patents related to defendant’s games and is seeking monetary damages.
−Removed: On July 7, 2021, the trial court issued an order finding each of the plaintiff’s asserted patents invalid as failing to comply with certain legal requirements and dismissing the lawsuit as to all parties.
−Removed: On July 19, 2021, the plaintiff appealed the trial court’s decision to the Court of Appeals for the Federal Circuit.
On November 23, 2021, the Company, its directors and certain of its officers were named in a putative class action lawsuit filed in the United States District Court for the Eastern District of New York (Bar-Asher v.
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The complaint is allegedly brought on behalf of a class of purchasers of the Company’s securities between January 15, 2021 and November 2, 2021, and alleges violations of federal securities laws arising out of alleged misstatements or omissions by the defendants during the alleged class period.
+Added: On March 10, 2022, the court appointed LBMotion Ltd as lead plaintiff, and the plaintiff filed an amended complaint on May 6, 2022.
+Added: The amended complaint alleges violations of Section 11 and 15 of the Securities Act of 1933 and seeks, among other things, damages and attorneys’ fees and costs on behalf of the putative class.
The complaint seeks, among other things, damages and attorneys’ fees and costs on behalf of the putative class.
−Removed: See “Business—Legal Proceedings.”
+Added: See “Business—Legal Proceedings.” Any securities class action litigation could subject us to substantial costs, divert resources and the attention of management from our business and harm our business, results of operations, financial condition and reputation.
+Added: These factors may materially and adversely affect the market price of our common stock.
Furthermore, our games may be implicated in lawsuits where we are not the named defendants.
For example, in October 2020 and January 2021 plaintiffs in several U.S.
−Removed: states sued Apple and/or Google alleging that the platforms violated state gambling laws by allowing the plaintiffs to download and play social casino games, including certain of our social casino games.
+Added: states sued Apple and/or Google alleging that the platforms violated state gambling laws by allowing the plaintiffs to download and play social casino games, including certain of our social casino
These lawsuits, or similar suits in the future, could cause Google, Apple, or other third-party platform providers to deny our social casino games access to their platforms or the platforms could seek to pass on liability, including defense costs, for these suits to us under the indemnity provisions in our agreements with such platforms, which could have a material adverse effect on our results of operations, cash flows, or financial condition.
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Our ability to retain paying players depends on our success in these geographies, and if we were to lose access to these markets or experience a decline in players in these geographies for any reason, it would have a material adverse effect on our business, financial condition and results of operations.
−Removed: The recent COVID-19 pandemic and similar health epidemics, contagious disease outbreaks and public perception thereof, could significantly disrupt our operations and adversely affect our business, results of operations, cash flows or financial condition.
−Removed: The recent COVID-19 pandemic, epidemics, medical emergencies and other public health crises outside of our control could have a negative impact on our business.
+Added: The COVID-19 pandemic and similar health epidemics, contagious disease outbreaks and public perception thereof, could significantly disrupt our operations and adversely affect our business, results of operations, cash flows or financial condition.
+Added: The COVID-19 pandemic, epidemics, medical emergencies and other public health crises outside of our control could have a negative impact on our business.
Large-scale medical emergencies can take many forms and can cause widespread illness and death.
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We have also experienced difficulty in our efforts to recruit and hire qualified personnel during this time.
−Removed: The COVID-19 pandemic could also affect the health of our consumers, which may affect sales of our virtual items in our games or result in lower-than-expected attendance
−Removed: at, or the cancellation of, events hosted by us (as has already occurred for a number of scheduled events).
+Added: The COVID-19 pandemic could also affect the health of our consumers, which may affect sales of our virtual items in our games or result in lower-than-expected attendance at, or the cancellation of, events hosted by us (as has already occurred for a number of scheduled events).
In addition, the COVID-19 pandemic has caused economic hardship, high unemployment rates and other disruptions, both in the United States and the rest of the world.
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Additionally, disposable income available for discretionary spending may be reduced by unemployment, higher housing, energy, interest, or other costs, or where the actual or perceived wealth of customers has decreased because of circumstances such as lower residential real estate values, increased foreclosure rates, inflation, increased tax rates, or other economic disruptions.
+Added: Moreover, in periods of increased inflation, such as the one that began in the second half of calendar year 2021, inflationary pressures have caused, and are expected to continue to cause, significant increases in the costs of other products and services which are required by consumers, such as gasoline, home heating and cooling fuels, housing and rental costs, or groceries, which in turn is likely to reduce household spending on the types of discretionary entertainment we offer, and may limit our ability to forecast future demand for our games.
Any prolonged or significant decrease in consumer spending on entertainment activities could result in reduced play levels in decreased spending on our games, and could adversely impact our results of operations, cash flows and financial condition.
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For example, we previously maintained an office in Crimea, but were forced to close and relocate our personnel as a result of Crimea’s annexation by Russia in 2014.
−Removed: Additionally, our primary offices are located in Israel and we have a large office in Belarus, and are therefore subject to a heightened risk of military and political instability.
+Added: Additionally, our primary offices are located in Israel and we have large offices in Belarus and Ukraine, and are therefore subject to a heightened risk of military and political instability.
For more information on risks related to our operations in Israel, see “—We have offices and other significant operations located in Israel, and, therefore, our results may be adversely affected by political, economic and military instability in Israel.” For more information on risks related to our operations in Belarus, see “—Our operations may be adversely affected by ongoing developments in Belarus, Ukraine or Romania.”
−Removed: In the occurrence of a catastrophic event, including a global pandemic like the ongoing COVID-19 pandemic or the consequences of climate change, we may be unable to continue our operations and may endure system interruptions, reputational harm, delays in application development, lengthy interruptions in our services, breaches of data security and loss of critical data, such as player, customer and billing data as well as intellectual property rights, software versions or other relevant data regarding operations, and there can be no assurances that our insurance policies will be sufficient to compensate us for any resulting losses, which could have a material adverse effect on our business, financial condition and results of operations.
+Added: In the occurrence of a catastrophic event, including a global pandemic like the COVID-19 pandemic or the consequences of climate change, we may be unable to continue our operations and may endure system interruptions, reputational harm, delays in application development, lengthy interruptions in our services, breaches of data security and loss of critical data, such as player, customer and billing data as well as intellectual property rights, software versions or other relevant data regarding operations, and there can be no assurances that our insurance policies will be sufficient to compensate us for any resulting losses, which could have a material adverse effect on our business, financial condition and results of operations.
+Added: We may not be able to maintain adequate insurance, and our insurance may not provide adequate levels of coverage against claims.
+Added: We believe that we maintain insurance customary for businesses of our size and type.
+Added: However, there are types of losses we may incur that cannot be insured against or that we believe are not economically reasonable to insure.
+Added: Moreover, any loss incurred could exceed policy limits and policy payments made to us may not be made on a timely basis.
+Added: In addition, we may not be able to obtain or renew certain insurance policies either on commercially reasonable terms of at all.
+Added: Such losses, or inability to maintain insurance, could adversely affect our business prospects, results of operations, cash flows and financial condition.
We primarily rely on skilled employees with creative and technical backgrounds.
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The loss of key game studio personnel, including members of management as well as key engineering, game development, artists, product, marketing and sales personnel, could disrupt our current games, delay new game development or game enhancements, and decrease player retention, which would have an adverse effect on our business.
−Removed: As we continue to grow, we cannot guarantee we will continue to attract the personnel we need to maintain our competitive position.
+Added: We cannot guarantee we will continue to attract the personnel we need to maintain our competitive position.
In particular, we expect to face significant competition from other companies in hiring such personnel as well as recruiting well-qualified staff in multiple international jurisdictions.
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If consumers do not find our games to be compelling or if other existing or new leisure time activities are perceived by our players to offer greater variety, affordability, interactivity and overall enjoyment, our business could be materially and adversely affected.
+Added: We recently launched an NFT (non-fungible token) product and marketplace which may expose us to legal, regulatory, and other risks that could adversely affect our business, financial condition, and results of operations.
+Added: We launched a blockchain-based NFT product called Reel Owners that enables our players to purchase non-fungible tokens (NFTs) related to our games.
+Added: Blockchain technology and NFTs are relatively new and emerging technologies.
+Added: The regulatory, commercial, and legal framework governing blockchain technologies and NFTs is likely to evolve both in the United States and internationally and implicates issues regarding a range of matters, including, but not limited to, intellectual property rights, privacy and cybersecurity, fraud, anti-money laundering, money transmission, sanctions, and currency, commodity, and securities law compliance.
+Added: It is difficult to predict how the legal and regulatory framework around blockchain technologies and NFTs will develop and how such developments will impact our business and our NFT marketplace.
+Added: NFT transactions also raise issues regarding compliance with laws of foreign jurisdictions, many of which present complex compliance issues and may conflict with other jurisdictions.
+Added: The launch of our NFT product and marketplace also subjects us to risks similar to those associated with any new product offering, including, but not limited to, our ability to accurately anticipate market demand and acceptance, our ability to
+Added: successfully launch the NFT marketplace, creator and buyer acceptance, technical issues with the operation of an NFT marketplace, reputational risk relating to the use of NFTs more broadly, and other legal and regulatory risks.
Our revenue growth rate and financial performance in recent periods may not be indicative of future performance, and our revenue growth rates may decline in the future compared to prior periods.
−Removed: We have experienced rapid revenue growth in recent periods, with revenue of $2,583.0 million, $2,371.5 million and $1,887.6 million, for the years ended December 31, 2021, 2020 and 2019.
+Added: We have experienced revenue growth in recent periods, with revenue of $2,615.5 million, $2,583.0 million and $2,371.5 million, for the years ended December 31, 2022, 2021 and 2020.
As we continue to grow our business, our revenue growth rates may decline compared to prior fiscal years due to a number of reasons, which may include more challenging comparisons to prior periods, a decrease in the growth of our overall market or market saturation, slowing demand for our games, our inability to continue to acquire games or game studios, and our inability to capitalize on growth opportunities.
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Our business may suffer if we do not successfully manage our current and potential future growth.
−Removed: We have grown significantly in recent years and we intend to continue to expand the scope of the games we provide.
+Added: We have grown in recent years and we intend to continue to expand the scope of the games we provide.
Our revenues increased to $2,615.5 million in 2022 from $2,583.0 million in 2021 and $2,371.5 million in 2020.
−Removed: Our anticipated future growth, particularly to the extent that we experience rapid growth, will likely place significant demands on our
−Removed: management and operations.
+Added: Our anticipated future growth, particularly to the extent that we experience rapid growth, will likely place significant demands on our management and operations.
Our success in managing our growth will depend, to a significant degree, on the ability of our executive officers and other members of senior management to operate effectively, and on our ability to improve and develop our financial and management information systems, controls and procedures.
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Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud may occur and not be detected.
−Removed: In addition, Section 404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate the report on our internal control over financial reporting beginning with this Annual Report of Form 10-K for the year ended December 31, 2021.
−Removed: Section 404 of the Sarbanes-Oxley Act of 2002 also requires our independent registered public accounting firm to attest to our evaluation beginning with our Annual Report on Form 10-K for the year ended December 31, 2022.
+Added: In addition, Section 404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate the report on our internal control over financial reporting beginning with the Annual Report of Form 10-K for the year ended December 31, 2021.
+Added: Section 404 of the Sarbanes-Oxley Act of 2002 also requires our independent registered public accounting firm to attest to our evaluation beginning with this Annual Report on Form 10-K for the year ended December 31, 2022.
We are in the process of preparing and implementing an internal plan of action for compliance with Section 404 and strengthening and testing our system of internal controls to provide the basis for our report.
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We cannot be certain that these measures will ensure that we implement and maintain adequate controls over our financial processes and reporting in the future.
−Removed: Even if we conclude, and our independent registered public accounting firm concurs, that our internal control over financial reporting provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, because of its inherent limitations, internal control over financial reporting may not prevent or detect fraud or misstatements.
+Added: Even if we conclude, and our independent registered public accounting firm concurs, that our internal control over financial reporting provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles,
+Added: because of its inherent limitations, internal control over financial reporting may not prevent or detect fraud or misstatements.
Failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our results of operations or cause us to fail to meet our reporting obligations.
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However, we intend to continue to make significant investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new games and features or enhance our existing games, improve our operating infrastructure or acquire complementary businesses, personnel and technologies.
−Removed: Accordingly, we may need to engage in equity or debt financings in addition to our Revolving Credit Facility to
−Removed: secure additional funds.
+Added: Accordingly, we may need to engage in equity or debt financings in addition to our Revolving Credit Facility to secure additional funds.
If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock.
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The ultimate outcome of these examinations cannot be predicted with certainty.
−Removed: As of December 31, 2021, liabilities for unrecognized tax benefits totaled $114.2 million, $83.8 million of which relate to our Israeli operations and the Preferred Technology Enterprise regime.
The Company believes that it is reasonably possible that the total amount of unrecognized tax benefits could increase significantly as a result of the open examination in Israel for the tax years ended 2017 through 2020.
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As a result, cash required for payments of income taxes, interest and penalties could be material in the period in which such determination is made.
−Removed: In addition, if such tax positions are not fully sustained, it could have an impact on our ability to take advantage of tax benefits associated with the Preferred Technology Enterprise regime in the future.
−Removed: While we believe that our reserves are adequate to cover reasonably expected tax risks, there can be no assurance that, in all instances, an issue raised by a tax authority will be resolved at a financial cost that does not exceed our related reserve and such resolution could have a material effect on our effective tax rate, financial condition, results of operations and cash flows in the current period and/or future periods.
+Added: In addition, if such tax positions are not fully sustained, it could have an impact on our ability to take advantage of certain tax benefits associated with the Preferred Technology Enterprise regime in the future.
+Added: During the fourth quarter of 2022, the Company received a tax assessment from the Israel Tax Authority for the 2017 tax year relating to the Preferred Technology Enterprise regime.
+Added: The Company completed its review of the assessment and is
+Added: preparing a response which we expect to file during the first quarter of 2023 that disputes the assessment.
+Added: We are unable to predict the ultimate outcome of resolution of the dispute, and it is possible that they could have a material effect on our effective tax rate, financial condition, results of operations and cash flows in future periods.
+Added: As discussed in Note 1, Organization and Summary of Significant Accounting Policies, the Company has a gross unrecognized tax benefit liability in Israel and gross offsetting tax benefits in the United States, the United Kingdom, and Austria associated with potential transfer pricing adjustments.
+Added: It is possible that Israel could examine the Company’s historical transfer pricing methodologies and propose an adjustment that would result in additional tax expense.
+Added: While tax treaties exist between Israel and the United States, United Kingdom, and Austria that reduce the risk of double taxation, in the event of an examination targeting our transfer pricing methodologies, there is a risk that the negotiation between these respective countries’ taxing authorities does not align with the Company’s expectation, therefore resulting in more net tax expense than what is estimated.
+Added: While we believe that our reserves are adequate to cover reasonably expected tax risks, there can be no assurance that, in all instances, an issue raised by a tax authority will be resolved at a financial cost that does not exceed our related reserve and such resolution could have a material effect on our effective tax rate, financial condition, results of operations and cash flows in future periods.
Our effective tax rate for 2022 was 23.7% compared with 24.5% for 2021.
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federal and state and foreign tax laws and regulations, or their interpretation and application, including the possibility of retroactive effect, could affect our tax expense.
−Removed: In addition, and in response to significant market volatility and disruptions to business operations resulting from the global spread of COVID-19, taxing authorities in many jurisdictions in which we operate may propose changes to their tax laws and regulations.
+Added: Taxing authorities in many jurisdictions in which we operate may propose changes to their tax laws and regulations in response to, among other things, evolving global tax landscapes.
These potential changes could have a material impact on our effective tax rate, long-term tax planning and financial results.
−Removed: Over the last several years, the Organization for Economic Cooperation and Development has been working on a Base Erosion and Profits Shifting Project that, if implemented, would change various aspects of the existing framework under which our tax obligations are determined in many of the countries in which we do business.
−Removed: In 2021, more than 140 countries tentatively signed on to a framework that imposes a minimum tax rate of 15%, among other provisions.
−Removed: As this framework is subject to further negotiation and implementation by each member country, the timing and ultimate impact of any such changes on our tax obligations are uncertain.
+Added: Over the last several years, the Organization for Economic Cooperation and Development (“OECD”) has been working on a Base Erosion and Profits Shifting Project that would change various aspects of the existing framework under which our tax obligations are determined in many of the countries in which we do business.
+Added: In October 2021, the OECD/G20 inclusive framework on Base Erosion and Profit Shifting (the Inclusive Framework) published a statement updating and finalizing the key components of a two-pillar plan on global tax reform which has now been agreed upon by the majority of OECD members.
+Added: Pillar One allows countries to reallocate a portion of residual profits earned by multinational enterprises (“MNEs”), with an annual global turnover exceeding €20 billion and a profit margin over 10%, to other market jurisdictions.
+Added: Pillar Two requires MNEs with an annual global turnover exceeding €750 million to pay a global minimum tax of 15%.
+Added: Additional guidance is expected to be published in 2023.
+Added: We will continue to monitor the implementation of the Inclusive Framework agreement by the countries in which we operate.
Similarly, the European commission and several countries have issued proposals that would apply to various aspects of the current tax framework under which we are taxed.
−Removed: These proposals include changes to the existing framework to calculate income tax, as well as proposals to change or impose new types of non-income taxes,
−Removed: including taxes based on a percentage of revenue.
+Added: These proposals include changes to the existing framework to calculate income tax, as well as proposals to change or impose new types of non-income taxes, including taxes based on a percentage of revenue.
For example, several jurisdictions have proposed or enacted taxes applicable to digital services, which includes business activities on digital advertising and online marketplaces, and which may apply to our business.
−Removed: Effective January 1, 2022, pursuant to the Tax Cuts and Jobs Act of 2017, R&D expenses are required to be capitalized and amortized for US tax purposes, which will delay the deductibility of these expenses and potentially increase the amount of cash taxes we pay.
+Added: We are unable to predict if and how these legislative changes will be enacted into law, and it is possible that they could have a material effect on our corporate tax liability and our global effective tax rate.
+Added: Effective January 1, 2022, pursuant to the Tax Cuts and Jobs Act of 2017, R&D expenses are required to be capitalized and amortized for tax purposes, which has delayed the deductibility of these expenses and increased the amount of cash taxes we paid during the year ended December 31, 2022.
+Added: We will recover these expenses in subsequent years such that the increased cash outlay is temporary.
+Added: In the future, among other things, Congress may consider legislation that would defer the capitalization requirement to later years or eliminate the capitalization requirement, possibly with retroactive effect, and/or the IRS may issue guidance on the currently enacted tax law which differs from our interpretation.
+Added: It is possible that the enactment of new legislation and/or issuance of IRS guidance could have a material effect on our financial condition, results of operations and cash flows in future periods.
Certain tax benefits that are available to us require us to continue to meet various conditions and may be terminated or reduced in the future, which could increase our costs and taxes.
We believe that our Israeli subsidiaries are eligible for certain tax benefits provided to a Preferred Technology Enterprise under the Israeli Law for the Encouragement of Capital Investments, 1959, or the Investment Law, including, inter alia , a reduced corporate tax rate on Israeli preferred technology taxable income, as defined in the Investment Law and its regulations.
−Removed: In order to remain eligible for the tax benefits for a Preferred Technology Enterprise our Israeli subsidiaries must continue to meet certain conditions stipulated in the Investment Law and its regulations, as amended.
+Added: In order to remain eligible for the tax benefits under the Preferred Technology Enterprise regime, our Israeli subsidiaries must continue to meet certain conditions stipulated in the Investment Law and its regulations, as amended.
If our Israeli subsidiaries were to fail to continue to meet such conditions, then our Israeli subsidiaries would not be eligible for such tax benefits and our Israeli taxable income would be subject to regular Israeli corporate tax rates.
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One or more U.S.
−Removed: states or countries may seek to impose incremental or new sales, value added taxes or use or other tax collection obligations on us.
+Added: states or countries may seek to impose incremental or new sales taxes, value added taxes or other tax collection obligations on us.
While we generally are not responsible for taxes generated on games accessed and operated through third-party platforms, we are responsible for collecting and remitting applicable sales, value added or other similar taxes for revenue generated on games accessed and operated on our own platforms.
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states or local governments may adopt, or begin to enforce, laws requiring us to calculate, collect and remit taxes on sales in their jurisdictions.
−Removed: As a result of the above, we are in the process of evaluating whether our activities give rise to sales, use, value added taxes and any other taxes in additional states or jurisdictions in which we historically have not registered to collect and remit taxes.
−Removed: A successful assertion by one or more U.S.
−Removed: states or other countries or jurisdictions requiring us to collect taxes where we presently do not do so, or to collect more taxes in a jurisdiction in which we currently collect some taxes, could result in substantial liabilities, including taxes on past sales, as well as interest and penalties, and could create significant administrative burdens for us or otherwise harm our business.
+Added: As a result of the above, we are in the process of working with certain jurisdictions to comply with filing requirements associated with our activities that have given rise to sales, use, value added taxes and any other taxes in additional states or jurisdictions in which we historically have not registered to collect and remit taxes.
+Added: A successful assertion by one or more taxing jurisdictions requiring us to collect taxes where we presently do not do so, or to collect more taxes in jurisdictions in which we currently collect some taxes, could result in substantial liabilities, including taxes on past sales, as well as interest and penalties, and could create significant administrative burdens for us or otherwise harm our business.
If certain U.S.
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If Section 7874 of the Code were to apply to such acquired U.S.
−Removed: corporation, then it would be treated as an “expatriated entity” for the purposes
−Removed: of these rules.
+Added: corporation, then it would be treated as an “expatriated entity” for the purposes of these rules.
As a consequence, Section 7874 of the Code would limit the ability of such acquired U.S.
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If we were treated as an expatriated entity, there could be significant adverse tax consequences to us.
−Removed: The rules under Section 7874 of the Code are complex and subject to detailed regulations (the application of which is uncertain in various respects and would be impacted by changes in such U.S.
+Added: The rules under Section 7874 of the Code are complex and subject to detailed regulations (the application of which is uncertain in
+Added: various respects and would be impacted by changes in such U.S.
Treasury regulations with possible retroactive effect) and factual uncertainties.
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We may be limited in our ability to utilize, or may not be able to utilize, net operating loss carryforwards to reduce our future tax liability.
−Removed: We have net operating loss carryforwards in certain jurisdictions, including Israel, Germany and Finland of $78.7 million, $5.6 million, and $3.4 million, respectively.
−Removed: The net operating losses in Israel and Germany are carried forward indefinitely.
+Added: We have net operating loss carryforwards in certain jurisdictions, including Israel, Finland, and the U.S of $121.7 million, $27.7 million, and $10.8 million, respectively.
+Added: The net operating losses in Israel and the U.S.
+Added: are carried forward indefinitely.
The net operating losses in Finland expire from 2031 through 2032.
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Accordingly, if we elect to rely on these exemptions in the future, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the Nasdaq rules.
+Added: We are exploring strategic alternatives strategic alternatives, but there can be no assurance that we will be successful in identifying or consummating any strategic alternatives, that strategic alternatives will yield additional value for stockholders, or that exploration of strategic alternatives will not adversely impact the Company.
+Added: On February 24, 2022, we announced that our Board of Directors had initiated a process to evaluate potential strategic alternatives to maximize value for stockholders .
+Added: There can be no assurance that the exploration of strategic alternatives will result in the identification or consummation of any transaction or any other particular outcome.
+Added: Speculation regarding any developments related to the review of strategic alternatives and perceived uncertainties related to the future of the Company could cause our stock price to fluctuate significantly.
+Added: The exploration of strategic alternatives could result in the diversion of management’s attention from our existing business;
+Added: failure to achieve financial or operating objectives;
+Added: incurrence of significant transaction expenses;
+Added: failure to retain, attract or strengthen our relationships with key personnel, vendors or customers;
+Added: and exposure to potential litigation in connection with this process and effecting any transaction or strategic alternative.
+Added: If we are unable to mitigate these or other potential risks related to the uncertainty caused by our exploration of strategic alternatives, it may disrupt our business or could have a material adverse effect on our business, financial condition or results of operations.
+Added: There can be no assurance that any potential transaction or other strategic alternative, if identified, evaluated and consummated, will provide greater value to our stockholders than that reflected in the current stock price.
+Added: Further, our Board of Directors may determine to suspend or terminate the exploration of strategic alternatives at any time due to various factors.
+Added: Any potential transaction or other outcome of this process is also dependent upon a number of factors that may be beyond our control, including among other factors, market conditions, industry trends, regulatory limitations and the interest of third parties in our business.
Risks Related to Our International Operations and Ownership
We face added business, political, regulatory, operational, financial and economic risks as a result of our operations and distribution in a variety of countries, any of which could increase our costs and hinder our growth.
−Removed: A significant portion of our operations are outside of the United States, including our principal executive offices in Israel, and we generate a significant portion of our revenues from operations outside of the United States.
+Added: A significant portion of our operations are outside of the United States, including our principal executive offices in Israel and large development centers in Ukraine and Belarus, and we generate a significant portion of our revenues from operations outside of the United States.
For each of the years ended December 31, 2022 and 2021, we derived approximately 29.5% and 29.7%, respectively, of our revenues from sales to players outside of the United States.
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While we have attempted to implement safeguards to discourage these practices by our employees, consultants and agents, violations of the FCPA may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which would negatively affect our business, results of operations and financial condition.
−Removed: Further, our ability to expand successfully in foreign jurisdictions involves other risks, including difficulties in integrating foreign operations, risks associated with entering jurisdictions in which we may have little experience and the day-to-day management of a growing and increasingly geographically diverse company.
+Added: Further, our ability to expand successfully in foreign jurisdictions involves other risks, including difficulties in integrating foreign operations, risks associated with entering jurisdictions in which we may have little experience and the day-to-day
+Added: management of a growing and increasingly geographically diverse company.
We may not realize the operating efficiencies, competitive advantages or financial results that we anticipate from our investments in foreign jurisdictions.
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Moreover, foreign jurisdictions could impose tariffs, quotas, trade barriers and other similar restrictions on our international sales.
−Removed: Additionally, while we maintain offices in the United States, most of our senior management and employees are located in our international offices, including our offices in Israel, Belarus, Ukraine and Romania, which subject us to added business,
−Removed: political and economic risks.
−Removed: As of December 31, 2021, we had operations in Australia, Austria, Belarus, Canada, Finland, Germany, India, Israel, Poland, Romania, Switzerland, Ukraine, the United Kingdom and the United States.
+Added: Additionally, while we maintain offices in the United States, most of our senior management and employees are located in our international offices, including our offices in Israel, Belarus, Ukraine and Romania, which subject us to added business, political and economic risks.
+Added: As of December 31, 2022, we had operations in Australia, Austria, Belarus, Finland, Germany, India, Israel, Poland, Romania, Switzerland, Ukraine, the United Kingdom and the United States.
We have in the past and may continue to experience disruption as a result of catastrophic events in the countries in which we operate.
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Accordingly, political, economic and military conditions in Israel directly affect our business.
−Removed: Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its trading partners could adversely affect our business and results of operations.
+Added: For example, the current political situation in Israel where the ruling parties are attempting to implement laws that essentially allow the parliament to enact laws that are preemptively immune to judicial review could adversely affect our business and results of operations.
+Added: In addition, any hostilities involving Israel or the interruption or curtailment of trade between Israel and its trading partners could adversely affect our business and results of operations.
Since the establishment of the State of Israel, a number of armed conflicts have taken place between Israel and its neighboring countries, as well as terrorist acts committed within Israel by hostile elements.
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Certain of our assets and the assets of these persons are located in Israel.
−Removed: Additionally, three of our five directors are residents of China.
+Added: Additionally, a number of our directors are residents of China.
Therefore, a judgment obtained against us, or any of these persons, including a judgment based on the civil liability provisions of the U.S.
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In addition, even if an Israeli or Chinese court agrees to hear a claim, it may determine that Israeli or Chinese law and not U.S.
−Removed: applicable to the claim.
+Added: law is applicable to the claim.
law is found to be applicable, the content of applicable U.S.
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Our operations may be disrupted as a result of the obligation of management or key personnel to perform military service.
−Removed: Our employees and consultants in Israel, including members of our senior management, may be obligated to perform one month, and in some cases longer periods, of annual military reserve duty until they reach the age of 40 (or older, for citizens who hold certain positions in the Israeli armed forces reserves) and, in the event of a military conflict, may be called to active duty.
+Added: Our employees and consultants in Israel, including members of our senior management, may be obligated to perform one month, and in some cases longer periods, of annual military reserve duty until they reach the age of 40 (or older, for citizens
+Added: who hold certain positions in the Israeli armed forces reserves) and, in the event of a military conflict, may be called to active duty.
In response to increases in terrorist activity, there have been periods of significant call-ups of military reservists.
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Since the early 1990s, Russia, Belarus, Ukraine, Romania and other central and eastern European countries have sought to transform from one-party states with a centrally planned economy to democracies with a market economy to various degrees.
−Removed: Despite various reforms, the political systems of many
−Removed: of these countries remain vulnerable and unstable.
−Removed: In addition, the political and economic situation in these countries is negatively affected by the global economic crisis and the ongoing economic recession in some parts of the world due to the COVID-19 pandemic.
+Added: Despite various reforms, the political systems of many of these countries remain vulnerable and unstable.
+Added: In addition, the political and economic situation in these countries is negatively affected by the global economic crisis and the economic recession in some parts of the world.
The political, civil and security situation in Belarus cannot be accurately predicted.
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Belarus shares borders with both Russia and Ukraine, and in February 2022, in connection with escalating tensions involving Russia and Ukraine, Russian military personnel stationed in Belarus were part of an invasion force by Russian forces into Ukraine.
−Removed: In response to the support and facilitation by Belarus for the invasion, the United States imposed sanctions against multiple individuals and entities in Belarus.
+Added: Since then, Belarus has been reported to be involved with and provide support to Russian efforts in Ukraine.
+Added: In response to the support and facilitation by Belarus for the invasion and ongoing conflict, the United States imposed sanctions against multiple individuals and entities in Belarus.
+Added: In January 2023, Belarus adopted legislation that allows it to replace management of Belarusian entities with foreign shareholders and seize the property of such entities.
Other potential retaliatory measures could be taken by the United States and other countries.
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Any disruption to our operations in Belarus, Ukraine or Romania may be prolonged and require us to reevaluate our operations in those countries, which may be more expensive and harm our business.
+Added: Our business may be affected by sanctions, export controls and similar measures targeting Russia and Belarus as well as other responses to Russia’s invasion of Ukraine.
+Added: As a result of Russia’s military conflict in Ukraine, governmental authorities in the United States, the European Union and the United Kingdom, among others, have launched numerous sanctions and export control measures, including:
+Added: • blocking sanctions on some of the largest state-owned and private Russian and Belarusian financial institutions (and their subsequent removal from SWIFT);
+Added: • blocking sanctions against Russian and Belarusian individuals, including the Russian President and the Belarussian President, other politicians and those with government connections or involved in Russian military activities;
+Added: • expansion of sectoral sanctions in various sectors of the Russian and Belarusian economies and the defense sector, including barring of Russian oil imports and purchases;
+Added: • United Kingdom sanctions introducing restrictions on providing loans to, and dealing in securities issued by, persons connected with Russia and restrictions on trade, including in connection with certain security-related goods and technology, iron and steel products, intercepting and monitoring services, maritime goods and technology, jet fuel and fuel additives and UK and EU currency banknotes;
+Added: • restrictions on access to the financial and capital markets in the European Union;
+Added: • prohibiting against U.S.
+Added: persons from making new investments in Russia;
+Added: • sanctions prohibiting most commercial activities of U.S.
+Added: and EU persons in Crimea and Sevastopol;
+Added: • enhanced export controls and trade sanctions targeting Russia’s imports of technological goods as a whole, including tighter controls on exports and reexports of dual-use items, stricter licensing policy with respect to issuing export licenses, and/or increased use of “end-use” controls to block or impose licensing requirements on exports, as well as higher import tariffs and a prohibition on exporting luxury goods to Russia and Belarus, and
+Added: • additional sanctions following the attempted annexation by Russia of Ukraine's Donetsk, Luhansk, Kherson and Zaporizhzhia regions, on October 6, 2022.
+Added: As the conflict in Ukraine continues, there can be no certainty regarding whether the governmental authorities in the United States, the European Union, the United Kingdom or other counties will impose additional sanctions, export controls, trade restrictions or other measures targeting Russia, Belarus or other territories.
+Added: Our business must be conducted in compliance with applicable economic and trade sanctions laws and regulations, including those administered and enforced by the U.S.
+Added: Department of Treasury’s Office of Foreign Assets Control, the U.S.
+Added: Department of State, the U.S.
+Added: Department of Commerce, the United Nations Security Council and other relevant governmental authorities.
+Added: We must be ready to comply with the existing and any other potential additional measures imposed in connection with the conflict in Ukraine.
+Added: The imposition of such measures could adversely impact our business, including preventing us from performing existing contracts, recognizing revenue, pursuing new business opportunities or receiving payment for products already supplied or services already performed with customers.
+Added: We review and monitor our contractual relationships with suppliers to establish whether any are target of the applicable sanctions.
+Added: In the unlikely event that we identify a party with which we have a business relationship that is the target of applicable sanctions, we would immediately commence a legal analysis of what gives rise to the business relationship, including any contract, to estimate the most appropriate course of action to comply with the sanction regulations, together with the impact of a contractual termination according to the applicable law, and then proceed as required by the regulatory authorities.
+Added: However, given the range of possible outcomes, the full costs, burdens, and limitations on our business may become significant.
+Added: Furthermore, even if an entity is not formally subject to sanctions, suppliers, customers and business partners of such entity may decide to reevaluate or cancel projects with such entity for reputational or other reasons.
+Added: As result of the ongoing conflict in Ukraine, many U.S., European and other multi-national businesses across a variety of industries, including consumer goods and retail, food, energy, banking and finance, media and entertainment, tech, travel and logistics, manufacturing and others, have indefinitely suspended their operations and paused all commercial activities in Russia and Belarus.
+Added: Depending on the extent and breadth of sanctions, export controls and other measures that may be imposed in connection with the conflict in Ukraine, it is possible that our business, financial condition and results of operations could be materially and adversely affected.
We are exposed to fluctuations in currency exchange rates, which could negatively affect our financial condition and results of operations.
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President Biden issued executive orders barring American investment into certain Chinese companies and initiating national security reviews of software applications linked to foreign adversaries such as China, and the U.S.
−Removed: government has sanctioned numerous Chinese nationals and added Chinese companies to the Department of Commerce Entity List.
+Added: government has sanctioned numerous Chinese nationals and added Chinese companies to the Department
+Added: of Commerce Entity List.
The Chinese government has taken similar measures, including passing the Anti-Foreign Sanctions Law and imposing sanctions on American nationals and organizations.
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businesses or foreign businesses with U.S.
−Removed: subsidiaries that we may wish to pursue may be subject to CFIUS review, the scope of which was recently expanded by the Foreign Investment Risk Review Modernization Act of 2018, or FIRRMA, to
−Removed: include certain non-passive, non-controlling investments (including certain investments in entities that hold or process personal information about U.S.
+Added: subsidiaries that we may wish to pursue may be subject to CFIUS review, the scope of which was recently expanded by the Foreign Investment Risk Review Modernization Act of 2018, or FIRRMA, to include certain non-passive, non-controlling investments (including certain investments in entities that hold or process personal information about U.S.
nationals), certain acquisitions of real estate even with no underlying U.S.
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Accordingly, our failure to develop or adjust to changes in technology, platforms, devices and operating models and evolving industry standards could adversely impact our business.
−Removed: Even where we are able to successfully adapt to changing technology, platforms, devices and operating models and evolving industry standards, we may require substantial expenditures to do so, which could adversely impact our business, financial condition and results of operations.
+Added: Even where we are able to successfully adapt to changing
+Added: technology, platforms, devices and operating models and evolving industry standards, we may require substantial expenditures to do so, which could adversely impact our business, financial condition and results of operations.
Our games and other software applications and systems, and the third-party platforms upon which they are made available, could contain undetected errors.
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We have contingency plans in place to prevent or mitigate the impact of these events.
−Removed: However, such disruptions could materially
−Removed: and adversely impact our ability to deliver games to players and interrupt other processes.
+Added: However, such disruptions could materially and adversely impact our ability to deliver games to players and interrupt other processes.
If our information systems do not allow us to transmit accurate information, even for a short period of time, to key decision-makers, the ability to manage our business could be disrupted and our results of operations, cash flows and financial condition could be materially and adversely affected.
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Further, in November 2020, California voters passed the California Privacy Rights Act, or CPRA.
−Removed: The CPRA significantly expands the CCPA, including by introducing additional obligations such as data minimization and storage limitations, granting additional rights
−Removed: to consumers, such as correction of personal information and additional opt-out rights, and creates a new entity, the California Privacy Protection Agency, to implement and enforce the law.
+Added: The CPRA significantly expands the CCPA, including by introducing additional obligations such as data minimization and storage limitations, granting additional rights to consumers, such as correction of personal information and additional opt-out rights, and creates a new entity, the California Privacy Protection Agency, to implement and enforce the law.
Further, there currently are a number of additional proposals related to data privacy or security pending before federal, state, and foreign legislative and regulatory bodies, including in a number of U.S.
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Additionally, the Israel Privacy Protection Authority, or the Privacy Protection Authority, may issue a public statement that an entity violated the PPL, and such a determination could potentially be used against such entity in civil litigation.
−Removed: The Israeli Ministry of Justice has introduced
−Removed: amendments to the PPL designed, among other things, to enhance the Privacy Protection Authority’s investigative and enforcement powers (including powers to impose fines) and to broaden data subject rights.
+Added: The Israeli Ministry of Justice has introduced amendments to the PPL designed, among other things, to enhance the Privacy Protection Authority’s investigative and enforcement powers (including powers to impose fines) and to broaden data subject rights.
Regarding transfers to the United States of personal data (as such term is used in the GDPR and applicable EU member state legislation) about our staff, European users, and other third parties, we have relied upon certain standard contractual clauses approved by the EU Commission (the SCCs).
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Failure to comply with such restrictions could subject us to criminal and civil sanctions and other penalties.
−Removed: In part due to the uncertainty of the legal climate, complying with regulations, and any applicable rules or guidance from regulatory authorities or self-regulatory organizations relating to privacy, data protection, information security and consumer protection, may result in substantial costs and may necessitate changes to our business practices, which may compromise our growth strategy, adversely affect our ability to attract or retain players, and otherwise adversely affect our business, reputation, legal exposure, financial condition and results of operations.
+Added: In part due to the uncertainty of the legal climate,
+Added: complying with regulations, and any applicable rules or guidance from regulatory authorities or self-regulatory organizations relating to privacy, data protection, information security and consumer protection, may result in substantial costs and may necessitate changes to our business practices, which may compromise our growth strategy, adversely affect our ability to attract or retain players, and otherwise adversely affect our business, reputation, legal exposure, financial condition and results of operations.
Any failure or perceived failure by us to comply with our posted privacy policies, our privacy-related obligations to players or other third parties, or any other legal obligations or regulatory requirements relating to privacy, data protection, or information security may result in governmental investigations or enforcement actions, litigation, claims (including class actions), or public statements against us by consumer advocacy groups or others and could result in significant liability, cause our players to lose trust in us, and otherwise materially and adversely affect our reputation and business.
Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations, and policies that are applicable to us may limit the adoption and use of, and reduce the overall demand for, our games.
−Removed: Additionally, if third parties we work with, such as our service providers or data sharing partners, violate applicable laws, regulations, or agreements, such violations may put our players’ and/or employees’ data at risk, could result in governmental investigations or enforcement actions, fines, litigation, claims (including class action claims) or public statements against us by consumer advocacy groups or others and could result in significant liability, cause our players to lose trust in us and otherwise materially and adversely affect our
−Removed: reputation and business.
+Added: Additionally, if third parties we work with, such as our service providers or data sharing partners, violate applicable laws, regulations, or agreements, such violations may put our players’ and/or employees’ data at risk, could result in governmental investigations or enforcement actions, fines, litigation, claims (including class action claims) or public statements against us by consumer advocacy groups or others and could result in significant liability, cause our players to lose trust in us and otherwise materially and adversely affect our reputation and business.
Further, public scrutiny of, or complaints about, technology companies or their data handling or data protection practices, even if unrelated to our business, industry or operations, may lead to increased scrutiny of technology companies, including us, and may cause government agencies to enact additional regulatory requirements, or to modify their enforcement or investigation activities, which may increase our costs and risks.
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Children’s Online Privacy Protection Act, or COPPA, regulates the collection, use and disclosure of personal information from children under 13 years of age.
+Added: The FTC has taken action against another gaming company relating to children’s’ privacy, and in December 2022, Epic Games, the maker of the popular game Fortnite, agreed to pay a $275 million fine for alleged violations of COPPA as well as take other corrective actions.
While none of our games are directed at children under 13 years of age, if COPPA were to apply to us, failure to comply with COPPA may increase our costs, subject us to expensive and distracting government investigations and could result in substantial fines.
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In addition, in some cases, we are dependent upon our platform providers to solicit, collect and provide us with information regarding our players that is necessary for compliance with these various types of regulations.
−Removed: Our business, including our ability to operate and expand internationally, could be adversely affected if laws or regulations are adopted, interpreted or implemented in a manner that is inconsistent with our current business practices and that require changes to these practices, the design of our games, features or our privacy policy.
+Added: Our business, including our ability to operate and expand internationally, could be adversely affected if laws or regulations are adopted, interpreted or implemented in a manner that is inconsistent with our current business practices and that require changes to these practices,
+Added: the design of our games, features or our privacy policy.
These platform providers may dictate rules, conduct or technical features that do not properly comply with federal, state, local and foreign laws, regulations and regulatory codes and guidelines governing data privacy, data protection and security, including with respect to the collection, storage, use, processing, transmission, sharing and protection of personal information and other consumer data.
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If we fail to comply with our posted privacy policy or terms of service or if we fail to comply with existing privacy-related or data protection laws and regulations, it could result in proceedings or litigation against us by governmental authorities or others, which could result in fines or judgments against us, damage our reputation, impact our financial condition and harm our business.
−Removed: If regulators, the
−Removed: media or consumers raise any concerns about our privacy and data protection or consumer protection practices, even if unfounded, this could also result in fines or judgments against us, damage our reputation, and negatively impact our financial condition and damage our business.
+Added: If regulators, the media or consumers raise any concerns about our privacy and data protection or consumer protection practices, even if unfounded, this could also result in fines or judgments against us, damage our reputation, and negatively impact our financial condition and damage our business.
In the area of information security and data protection, many jurisdictions have passed laws requiring notification when there is a security breach involving personal data or requiring the adoption of minimum information security standards that are often vaguely defined and difficult to implement.
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Though we own certain patents and patent applications relating to our technology and games, it is possible that third parties, including our competitors, may develop similar technology that is not within the scope of our patents, which would limit the competitive advantage of our patented technology, or obtain patents relating to technologies that overlap or compete with our technology.
−Removed: If third parties obtain patent protection with respect to such technologies, they may assert that our technology infringes their patents and seek to charge us a licensing fee or otherwise preclude the use of our technology.
+Added: If third parties obtain patent protection with respect to such technologies, they may assert that our technology infringes their patents and seek to charge us a licensing fee or
+Added: otherwise preclude the use of our technology.
We have pursued and continue to pursue the filing of patents and registration of trademarks in the United States and certain foreign jurisdictions, a process that is expensive and time-consuming and may not be successful.
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Playtika Ltd., Playtika Holding Corp.
−Removed: and Caesars Interactive
−Removed: Entertainment LLC , was filed against Playtika Holding Corp., Playtika Ltd., our subsidiary, and CIE in U.S.
+Added: and Caesars Interactive Entertainment LLC , was filed against Playtika Holding Corp., Playtika Ltd., our subsidiary, and CIE in U.S.
District Court, District of Nevada alleging infringement of certain patents related to plaintiff’s games.
−Removed: See “Business—Legal Proceedings.”
If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
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Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.
−Removed: In addition, while it is our policy to require our employees and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property that we regard as our own.
+Added: In addition, while it is our policy to require our employees and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property that we
+Added: regard as our own.
The assignment of intellectual property rights may not be self-executing, or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property.
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In addition, certain intellectual property rights may be licensed to us on a non-exclusive basis.
−Removed: The owners of nonexclusively licensed intellectual property rights are free to license such rights to third parties, including our competitors, on terms that may be superior to those offered to us,
−Removed: which could place us at a competitive disadvantage.
+Added: The owners of nonexclusively licensed intellectual property rights are free to license such rights to third parties, including our competitors, on terms that may be superior to those offered to us, which could place us at a competitive disadvantage.
Moreover, our licensors may own or control intellectual property rights that have not been licensed to us and, as a result, we may be subject to claims, regardless of their merit, that we are infringing or otherwise violating the licensor’s rights.
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We monitor our use of open source software and try to use open source software in a manner that complies with the terms of the open source licenses while at the same time not requiring the disclosure of the source code of our proprietary software.
−Removed: Our failure to comply with the terms of the open source licenses could require us to replace certain code
−Removed: used in our games, pay a royalty or license fee to use some open source code, make the source code of our games publicly available, pay damages for copyright infringement or breach of contract of open source licenses, or temporarily or permanently discontinue certain games.
+Added: Our failure to comply with the terms of the open source licenses could require us to replace certain code used in our games, pay a royalty or license fee to use some open source code, make the source code of our games publicly available, pay damages for copyright infringement or breach of contract of open source licenses, or temporarily or permanently discontinue certain games.
The above risks could have a material adverse effect on our competitive position, business, reputation, legal exposures, financial condition, results of operations, and prospects.
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and CIE regarding our use of certain patents related to certain of the defendant’s games.
−Removed: See “Business—Legal Proceedings.” A successful claim of infringement by a third party against us, our games or one of our licensees in connection with the use of our technologies, game mechanics or procedures, or an unsuccessful claim of infringement made by us against a third party or its products or games, could adversely affect our business or cause us financial harm.
+Added: A successful claim of infringement by a third party against us, our games or one of our licensees in connection with the use of our technologies, game mechanics or procedures, or an unsuccessful claim of infringement made by us against a third party or its products or games, could adversely affect our business or cause us financial harm.
Any such claim and any resulting litigation, should it occur, could:
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We may be required to protect our proprietary technology and content in an increasing number of jurisdictions, a process that is expensive and may not be successful, or which we may not pursue in every location.
−Removed: Filing, prosecuting, maintaining, defending, and enforcing our intellectual property rights in all jurisdictions throughout the world would be prohibitively
−Removed: expensive, and our intellectual property rights in some jurisdictions outside the United States may be less extensive than those in the United States.
+Added: Filing, prosecuting, maintaining, defending, and enforcing our intellectual property rights in all jurisdictions throughout the world would be prohibitively expensive, and our intellectual property rights in some jurisdictions outside the United States may be less extensive than those in the United States.
Competitors may use our technologies in jurisdictions where we have not obtained protection to develop their own games and, further, may export otherwise violating games to territories where we have protection but enforcement is not as strong as that in the United States.
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The price of our common stock may fluctuate substantially.
−Removed: The market price of our common stock has been volatile during our first year of trading, with a 52 week low of $16.25 and high of $36.06.
−Removed: The market price of our common stock following this offering may be highly volatile and may fluctuate or decline substantially as a result of a variety of factors, some of which are beyond our control or are related in complex ways, including:
+Added: The market price of our common stock was volatile during our first two years of trading, with a low of $7.81 and high of $36.06.
+Added: The market price of our common stock may continue to be highly volatile and may fluctuate or decline substantially as a result of a variety of factors, some of which are beyond our control or are related in complex ways, including:
• changes in analysts’ estimates, investors’ perceptions, recommendations by securities analysts or our failure to achieve analysts’ estimates;
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• announcements related to patents issued to us or our competitors and related litigation;
+Added: • announcements by and transactions involving our stockholders, including Playtika Holding UK;
• developments in our industry.
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The complaint is allegedly brought on behalf of a class of purchasers of the Company’s securities between January 15, 2021 and November 2, 2021, and alleges violations of federal securities laws arising out of alleged misstatements or omissions by the defendants during the alleged class period.
−Removed: The complaint seeks, among other things, damages and attorneys’ fees and costs on behalf of the putative class.
+Added: On March 10, 2022, the court appointed LBMotion Ltd as lead plaintiff, and the plaintiff filed an amended complaint on May 6, 2022.
+Added: The amended complaint alleges violations of Section 11 and 15 of the Securities Act of 1933 and seeks, among other things, damages and attorneys’ fees and costs on behalf of the putative class.
See “Business—Legal Proceedings.” Any securities class action litigation could subject us to substantial costs, divert resources and the attention of management from our business and harm our business, results of operations, financial condition and reputation.
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Our stock price and trading volume may be heavily influenced by the way analysts and investors interpret our financial information and other disclosures.
−Removed: If securities or industry analysts do not publish research or reports about our business, delay publishing reports about our business, or publish negative reports about our business, regardless of accuracy, our common stock price and trading volume could decline.
+Added: If securities or industry analysts do not publish research or reports about our business,
+Added: delay publishing reports about our business, or publish negative reports about our business, regardless of accuracy, our common stock price and trading volume could decline.
The trading market for our common stock is influenced to some extent by the research and reports that industry or financial analysts publish about us and our business.
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There can be no assurance that the aforementioned explorations of potential transactions will lead to any transactions being agreed or consummated by Playtika Holding UK, and it is possible that the consummation of any such possible transactions could negatively affect the price of our common stock.
+Added: On June 28, 2022, Playtika Holding UK announced on Schedule 13D that Playtika Holding UK had entered into a Stock Purchase Agreement (the “Playtika Holding UK – Joffre SPA”), dated as of June 27, 2022, with Joffre Palace Holdings Limited (“Joffre”), pursuant to which, among other things, Joffre agreed to acquire 106,102,467 shares (the “Purchased Shares”) of the common stock of the Company from Playtika Holding UK, subject to certain terms and conditions.
+Added: On January 3, 2023, Playtika Holding UK announced on Schedule 13D that on January 1, 2023, Playtika Holding UK notified Joffre that it was terminating the Playtika Holding UK – Joffre SPA.
+Added: Playtika Holding UK may elect to enter into similar transactions in the future, which could similarly potentially negatively affect the price of our common stock.
Provisions in our corporate charter documents and under Delaware law could make an acquisition of us more difficult and may prevent attempts by our stockholders to replace or remove our current management.
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and provided further that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state or federal court sitting in the State of Delaware.
−Removed: Our amended and restated certificate of
−Removed: incorporation also provides that the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action against us or any of our directors, officers, employees or agents and arising under the Securities Act of 1933, as amended, or the Securities Act.
+Added: Our amended and restated certificate of incorporation also provides that the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action against us or any of our directors, officers, employees or agents and arising under the Securities Act of 1933, as amended, or the Securities Act.
We believe these provisions may benefit us by providing increased consistency in the application of Delaware law and federal securities laws by chancellors and judges, as applicable, particularly experienced in resolving corporate disputes, efficient administration of cases on a more expedited schedule relative to other forums and protection against the burdens of multi-forum litigation.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.