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Analyst calls for Zynga to fire Mattrick

Industry-watcher criticizes exec for unfocused strategy, attempt to branch out into new genres

A year and a half into Don Mattrick's tenure at Zynga, the CEO has yet to turn the social game company's fortunes around, and patience is wearing thin. USA Today reports that BTIG analyst Richard Greenfield called for Matrick's ouster today in a note to investors after Zynga's disappointing fourth quarter earnings yesterday.

"Your strategy appears to be all over the place," Greenfield said in a portion of the note directed to Mattrick. "Your core franchises have and continue to generate meaningful earnings, yet that is being completely offset by your attempts to find the next hit games in categories where Zynga has no underlying expertise."

Not all industry-watchers were quite so down on the company's prospects. In his own note to investors today, Wedbush's Michael Pachter said investors have clearly lost their patience and confidence in the company, but maintained his "outperform" rating on the stock.

"While we are disappointed in the slow progress that Zynga is making, we are confident that management is, indeed, making progress," Pachter said.

Pachter also addressed the company's plan to launch 6-10 new games this year, including some in genres it hasn't attempted before.

"We think that each genre has some potential to generate meaningful revenue, but since Zynga has been saying 'trust us' for over a year and a half, we think investors are right to say 'show us' in response. Until we see games launch, we advise investors to be patient, as the company continues to build its game portfolio without burning too much cash."

Yesterday, Zynga reported a loss of $45 million for the fourth quarter, bringing its full-year losses to $226 million in what Mattrick called "a year of progress." The company also announced the closure of its Chinese operations after local product FarmVillage failed to meet expectations.

Zynga shares closed today's trading at $2.24, down 16 percent.

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Latest comments (4)

Tim Carter Designer - Writer - Producer 2 years ago
Unfocussed strategy?

That is known as ENTERTAINMENT.

What is the "focussed strategy" of Paramount Pictures, for example? There is none. You just listen to your talent, produce product and look for hits.

Top down command works in the mining or manufacturing industry. Not in entertainment.

Edited 2 times. Last edit by Tim Carter on 16th February 2015 9:44pm

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Alfonso Sexto Lead Tester, Ubisoft Germany2 years ago
"...attempts to find the next hit games in categories where Zynga has no underlying expertise"

Since when being open and aim to new markets and adaptability is something that is wrong? It is exactly because of their direction of doing the same again and again that Zynga has been going down in the last four years. So... what? now this analysts call for this guy to be fired because he does not want to continue a model and policy responsible of this four years of continuous decline? If that is the case I think he is not the one who needs to be fired here.

Taking risks is somewhat dangerous in the industry nowadays, and production is getting more expensive. But for Zynga it may be the only chance. Since what they are doing now will not work for long. Whatever the analysts want to accept it or not.

Edited 1 times. Last edit by Alfonso Sexto on 18th February 2015 8:30am

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Axel Cushing Freelance Writer 2 years ago
Since when being open and aim to new markets and adaptability is something that is wrong?
It became wrong the moment the investors didn't make every penny they were told they'd make this last quarter.
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Adam Campbell Game Production Manager, Azoomee2 years ago
I think it would be very interesting to know exactly where these losses are being made.
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