Zynga announced Microsoft's Don Mattrick will be the new CEO as Pincus willingly steps aside, remaining as Chairman and Chief Product Officer.Mattrick is an industry vet with a long track record of success, and we are supportive of the move. As we wait to learn how the strategy will change under the incoming CEO, we note Zynga still faces the daunting task of creating hit mobile games.
Microsoft's Don Mattrick named the new CEO of Zynga. Don is a successful industry vet and we support the move. At MSFT, he was President of the Xbox division for the past 3yrs, and oversaw businesses & services focused on consumer products like Kinect and PC /mobile products for 3 add'l years. Under his leadership, the Xbox install base grew from 10 to 80MM (Live subs grew from 6MM to 50MM+) and the business transformed from deep losses to profits. More recently, Mattrick came under fire (from gamers) for (since retracted) controversial used games policies with Xbox One. Prior to
Microsoft, Don spent 15 years at Electronic Arts as President of Worldwide Studios, where he developed and scaled hits likeFIFA and The Sims. At age 17, Mattrick founded Distinctive Software, which was acquired by EA in 1991.
Current CEO Mark Pincus to willingly step aside and will remain as Chairman and Chief Product Officer. Given Pincus retains full voting control at Zynga, he could not have been forced out. Note Kleiner Perkins' John Doerr joined the Zynga board in April, and we believe the board likely played an active role in the CEO transition and the aggressive cost cuts announced in June. On the official press release, three Zygna board members – Jeffrey Katzenberg (CEO, DreamWorks), Reid Hoffman (Founder & Chairman, LinkedIn), and Bing Gordon (General Partner, KPCB) -- all voiced strong support for Mattrick.
It remains unclear how / if the strategy will change with the incoming CEO, but the bottom line is Zynga still needs its creative teams to develop hit mobile games (no small task). In the console world, game developers like EA have focused on releasing fewer titles, putting significantly more development resources behind each title to improve game quality (and best the competition). We think Zynga is likely to take a page from this playbook as it leverages its size advantage (~2,370 employees, post-reduction) to raise the bar on its biggest brands. Note the company has already said it intends to focus on fewer titles. Zynga's cash + real estate totals about $2.26 / share. Zynga has net cash ($1.57B and real estate (purchased its San Francisco HQ for $228MM) totaling ~$1.8B, or ~$2.26 /share.