Zynga’s founding CEO Mark Pincus, left, and new CEO Don Mattrick.
Don Mattrick boasts a résumé that reads like a teenager's fantasy: Founded first gaming company at age 17, sold it a decade later for $10-million, then resurrected the Xbox. Now, the Canadian behind the blockbuster success of the Microsoft Corp. console is about to take on one of the most daunting challenges in the video game industry – saving Farmville.
Mr. Mattrick has been named the new chief executive officer of Zynga Inc., the company responsible for some of the most popular games on the Facebook social network, but which has struggled mightily to turn that popularity into profits. Zynga hopes Mr. Mattrick can help the company expand beyond its traditional Facebook-based, casual games.
Mr. Mattrick is one of the brightest stars in the video game industry. After selling his first video company to Electronic Arts, Mr. Mattrick worked at EA for 15 years. Perhaps his most notable achievement at the company was securing several blockbuster franchises, including the Madden NFL and Harry Potter games.
Since joining Microsoft in 2007, Mr. Mattrick has helped turn the once unprofitable Xbox game console into one of Microsoft's best-selling products. He also helped build the Kinect motion sensor, which has ushered in a new era of hands-free gaming.
However, his tenure at Microsoft ended on a sour note, as customers rebelled against what they saw as restrictive new measures built into the company's upcoming Xbox One gaming console – for example, the system will not work unless the user has a near-constant Internet connection. The outcry was so loud that Microsoft had to withdraw some of the measures.
The one area in which Mr. Mattrick doesn't have much experience is social and mobile gaming – but perhaps that's the point.
For years, Zynga has suffered from an extremely narrow focus. Much of the company's revenue comes from its Facebook-based games. In fact, Zynga accounted for 12 per cent of Facebook's revenue in 2011.
But the game-maker has had trouble keeping users interested in its Facebook titles, and making those titles profitable on mobile devices. With Mr. Mattrick's hiring, Zynga may be attempting to hedge its bets by putting its titles on more consoles and storefronts, as well as trying to develop or purchase the kinds of big-name franchises Mr. Mattrick secured while he was with EA.
One possible area of growth for Zynga is virtual game stores. The newest consoles from Microsoft, Nintendo and Sony all feature virtual stores where users can buy and download games without having to go to a retail store.
Such virtual marketplaces have been a boon to the creators of small and independent games, who are usually unable to sell their games in brick-and-mortar stores because of the associated costs. For Zynga, a chief executive officer such as Mr. Mattrick, who was instrumental in the creation and expansion of such virtual stores, is a major advantage.
According to a person familiar with the negotiations, Zynga founder and outgoing CEO Mark Pincus pursued Mr. Mattrick to take the position. The two men have been friends for years, and Mr. Pincus is eager to frame the hiring as a positive transition initiated by him, rather than a response by the company's board of directors to some of Zynga's misfortunes over the last year under Mr. Pincus's tenure.
"[Mr. Mattrick] can execute in multiple domains – hardware, software and network, and he's been the person responsible for game franchises like Need for Speed, FIFA and The Sims," said Mr. Pincus. "He turned Xbox into the world's largest console-gaming network, growing its installed base from 10 [million] to 80 million and transformed that business from deep losses to substantial profits."
Zynga rose to prominence on the back of such once-popular games as Farmville and Cityville. The games, like virtually all of Zynga's titles, were designed for casual play, with flat learning curves and a seemingly inexhaustible supply of easily digestible goals and missions.
However, the company's games have, in recent years, been subject to a predictable cycle: after an initial burst of popularity, the games tend to quickly lose users to the next social gaming phenomenon.
The cycle repeated itself with such titles as Zynga's 2009 game Words With Friends, which gained a huge following but was eventually eclipsed by the likes of Draw Something. Zynga bought Draw Something and the company that created it in 2012, but that game also saw its user base diminish, as players flocked to the next sensation, a Facebook-based game called Candy Crush Saga. In almost every case, the success of Zynga's titles is rapid but short-lived.
As the trend became clear, investors turned sour on the company. Shortly after its initial public offering, Zynga saw its share price hit a high of $14.69 (U.S.) on the Nasdaq Stock Market. Since that time, the share price has plummeted to the $3 range. One month ago, Zynga closed four of its studios and laid off more than 500 workers.
Shares of Zynga jumped more than 10 per cent on Monday, after news of Mr. Mattrick's hiring.