Zynga hires Microsoft Xbox chief as CEO
Zynga has appointed the former president of the Interactive Entertainment Business at Microsoft as CEO.
Don Mattrick has replaced founder Mark Pincus after being personally recruited to head the ailing games company. Mattrick, part of Microsoft since 2007 and credited with leading the team that created Microsoft's Xbox and developing the product into a globally popular console, will now act as CEO -- but an interesting management system leaves questions as to who is actually in charge.
The 49 year-old is at least, in name, chief executive officer. However, Zynga's management structure, comprised of two tiers, means that Pincus will hold on to 61 percent of voting rights as well as claiming the chief product officer position.
People close to the situation told Reuters that Mattrick "hesitated" before accepting the position. However, Wall Street seemed to take the news with good cheer -- as Zynga shares shot up over ten percent after the shake-up.
In 2007 and through the early years, Zynga connected users of the Facebook platform to games. The company's business model was heavily dependent on Facebook, and while the business did well by selling virtual goods through games including Farmville and Words with Friends, profit margins declined as more users shifted to games on mobile devices. As a result, Zynga is now worth only 25 percent of its initial $10 offering price.
According to sources, Pincus privately admitted he lacked the capabilities necessary in recent months to keep Zynga afloat. As a result, after member of the board and investor Bing Gordon suggested recruiting Mattick, the former Microsoft president and Pincus held a number of meetings in California and Seattle.
In a statement revealing the change, Mattrick said:
"I joined Zynga because I believe that Mark's pioneering vision and mission to connect the world through games is just getting started. I've always said to Bing and our Board that, if I could find someone who could do a better job as our CEO, I'd do all I could to recruit and bring that person in. I'm confident that Don is that leader."