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Don Mattrick leaves Zynga, stock tanking

Update: Head of Zynga Studios also left in March

It seems Don Mattrick isn't the only one who decided to depart Zynga this spring; the company has confirmed to GamesBeat that Alex Garden, the head of Zynga Studios, left in March.

Zynga called it a “mutual decision.”

Garden joined the company in April 2014. His 25 years of industry experience include roles as the former general manager of Xbox Live, former CEO of Nexon Publishing and founder of Relic Entertainment.

Original story

Don Mattrick's time as Zynga's CEO has ended less than two years after he took the job. The social gaming publisher today announced that Mattrick has left the company, and original founder and chairman Mark Pincus has stepped back in as CEO, effective immediately.

"When I joined the company in July 2013, Mark and I shared a vision of building a meaningful company that redefines entertainment in an increasingly mobile world," Mattrick said in a statement. "I am proud of the progress we have made together. I believe the timing is now right for me to leave as CEO and let Mark lead the company into its next chapter given his passion for the founding vision and his ability to couple our mobile progress with Zynga's unique strengths. As a company, Zynga is in a stronger position today to serve mobile consumers and take advantage of the unprecedented growth opportunity across our industry. I am excited about the company's trajectory and wish the best for Mark, Zynga and NaturalMotion as I plan to return to Canada to pursue my next challenge."

Mattrick had come under fire for Zynga's continued losses under his leadership. In February, BTIG analyst Richard Greenfield called for Mattrick to be fired after the company posted a $226 million loss for what Mattrick called "a year of progress."

Pincus issued a statement thanking Mattrick for his leadership in pushing the company more toward mobile, noting that mobile accounted for only 27 percent of Zynga's bookings when Mattrick joined, but rose to 60 percent by the end of last year. He also noted the $527 million acquisition of NaturalMotion and the lineup of upcoming games as accomplishments of Mattrick and his team.

"Now that we are a mobile first company, it's time to renew our focus on our founding mission to connect the world through games and our vision to make play and social games a mass market activity," Pincus said. "I am returning to the company that I love in order to accelerate innovation in the most popular categories like Action Strategy and strengthen our focus on our core areas like Invest and Express. I look forward to partnering with our leaders to intensify our focus on social experiences for the millions of consumers who play our games."

Mattrick came to Zynga from Microsoft, where he had been serving as head of Xbox. Microsoft's top gaming executive didn't come cheap, as Mattrick was wooed with a $5 million signing bonus, $1 million annual salary, and $40 million in stock options. While most of those stock options have not yet vested, Mattrick's contract states that in the case of a "constructive termination," he would receive the first $25 million of those stock options regardless, as well as two years' salary and bonuses.

In announcing Mattrick's departure, Zynga also noted that Pincus has requested an annual salary of $1 while he serves as CEO.

Update: Analysts so far haven't been too shocked by the news. The writing was on the wall for Mattrick, it seems. "To me it wasn't a big surprise. Zynga was a turn around project when he joined and they weren't turning around and Mattrick was extremely expensive. That does not go well with investors," DFC Intelligence's David Cole commented to GamesIndustry.biz. "So I think really with Zynga it is a case of whether these new projects they have in the pipeline can expand their audience into more of that Clash of Clans, Game of War audience that is doing quite well. They really need products along those lines."

Investors don't appear to be very pleased at all with the news that Mark Pincus is taking the reins again at Zynga. While the stock closed at up slightly at $2.90 on Wednesday, as of this writing in after-hours trading it's dropped more than 10 percent to $2.60. Zynga's got a tough road ahead.

Update: The full details of Don Mattrick's severance package have been detailed in an SEC filing. Zynga's outgoing CEO will receive a pre-agreed sum of $4 million, to be paid over the next 24 months, along with around $1 million as an annual bonus. In addition, Zynga will "accelerate the vesting" of more than 5.1 million shares, which will be exercisable at any point over the next 24 months.

Of course, those shares are worth less now than the day Mattrick took control of the company, but traded at the after-hours price of $2.60 they would nevertheless be worth an additional $13 million.

If you have jobs news to share or a new hire you want to shout about, please contact us on newhires@gamesindustry.biz

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Latest comments (22)

Anthony Gowland Director, Ant Workshop4 years ago
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Tim Carter Designer - Writer - Producer 4 years ago
Everybody knows all about the suits.... Where is the breaking news about the creatives?
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Quincy Ward Studying Computer Science, University of Arkansas4 years ago
To be honest I am starting to wonder now how long mobile gaming is going to last..... I used to play games on my phone ALL the time. I don't at all now. I bought Machinarium about 2 months ago and played it once and it wasn't even the same day I bought it.

Since I bought the PS4 I have realized this is definitely how I prefer to game.

I have been thinking about buying Oceanhorn: Monster of Uncharted Seas just to see if it'll get me back into Mobile Gaming. I Have not even played Checkers or Words with Friends to kill time. I now fire up Netflix or Spotify to kill time or see what has been sent to me recently in Whatsapp...
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Show all comments (22)
Anthony Gowland Director, Ant Workshop4 years ago
It would be foolish to extrapolate your own playing habits out as the thoughts of a wider audience, when the numbers show a very different picture.
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Raymond Goldsmith Chairman & CEO, ISM4 years ago
What absolute mess dumped yet again on the "lucky" shareholders that got stuffed first on the IPO and then again by Morgan Stanley when they did another selling "pump it up" job a year or so after their IPO tanked !!!

But hey, Pincus and his VC cohorts are sitting pretty so no real harm done unless your pension money sits in one of the countless funds that were stupid enough to buy in yo it... And now King have done the self same thing ...
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these guys continue to fail all the way to the top. How much money did he get paid to be bad at his job? Must be nice to be in that club.

Edited 1 times. Last edit by Todd Weidner on 8th April 2015 10:35pm

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So when he moved across after the Xbone debacle and those of us that questions his value were derided - we were told of the value he brought and the opportunity - now we learn of the midnight departure and no questions asked of the actual value brought to the table - is this to spare the blushes of those that though he had a value? Time the true value of the executives in this sector are placed under the microscope before we see another 1984 collapse!
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Quincy Ward Studying Computer Science, University of Arkansas4 years ago
You are right and I agree
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Jeff Kleist Writer, Marketing, Licensing 4 years ago
Of course, there were all of us who said Zynga was doomed before Mattrik got there;)

Mobile will continue to be a pile of one-hit wonders that make a ton of money over the short term. I personally wouldn't buy in in any way until a proven track record over at least five years.
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Jeff Kleist Writer, Marketing, Licensing 4 years ago
Of course, there were all of us who said Zynga was doomed before Mattrik got there;)

Mobile will continue to be a pile of one-hit wonders that make a ton of money over the short term. I personally wouldn't buy in in any way until a proven track record over at least five years.
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Ron Dippold Software/Firmware Engineer 4 years ago
The WSJ article has an absolutely priceless snippet from Pincus:
I can bring a deeper DNA strand and intensity of focus.
A. Deeper. DNA. Strand. Bay Area tech creative vomit at its finest.
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Alfonso Sexto Lead Tester, Ubisoft Germany4 years ago
I'm still seeing a big risk of an equivalent to the game crash of 1983 within the mobile market.
Still, those looses couldn't be connected to the acquisition of NaturalMotion, I think it was 2-3 years ago when EA reported looses because of their multiple IP and company acquisition that years although they had very strong sales...

@Quincy:
It's the same for me, although I don't think mobile market will go away. It will most likely be reduced as time passes, but I doubt it will be gone. I'm more inclined to think that portable consoles will be gone in a few years (specially after Nintendo's mobile deal with DeNA) although traditional ones (and PC, especially) will keep growing steadily during that time period.
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Matt Jeffries Senior Producer, Telstra4 years ago
On top of whatever salary he got failing to the top, reports are he got another $15 million to "leave".
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Dave Herod Senior Programmer, Codemasters4 years ago
Alfonso/Quincy: Mobile revenues are still growing, expected to be more than consoles in 2015. I'm not sure where you get the idea that mobile's suddenly on its way down in any way.

Edited 1 times. Last edit by Dave Herod on 9th April 2015 9:16am

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Quincy Ward Studying Computer Science, University of Arkansas4 years ago
Not saying that it is on its way down today no not at all. But as I stated I paid for game on mobile but played it once and am still willing to pay for another to try it out. Eventually I will no longer do this. Speaking for myself but I am sure I am not the only one and no I am not saying that because this is my behavior everyone is doing it but I am sure there is a good percentage.

Edited 2 times. Last edit by Quincy Ward on 9th April 2015 2:50pm

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Reza Ghavami Marketing Analyst, NVIDIA4 years ago
MATTRICK WINS

FATALITY
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James Berg Games User Researcher, EA Canada4 years ago
Revenu going up, barrier-to-entry going down, overall engagement up... and people think mobile is heading for a crash? What?
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Paul Johnson Managing Director / Lead code monkey, Rubicon Development4 years ago
It's just the people that are reliant on that market for their wages who know this atm. Outside observers can point to a variety of upward trending numbers, but you have to split all that between 18 trillion developers. For each one, they make jack shit and are abandoning mobile like the proverbial rats. That's where the crash is coming from and it's actually already started if you know what to look at.
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Alfonso Sexto Lead Tester, Ubisoft Germany4 years ago
@Dave Maybe because I never said "In it's way down", nor I was talking about 2015.
What I can see is that current top 15 mobile games are almost the same as last year, that each store gets thousands of apps per month and that the competition is insane within the predominant F2P model.
But you got me wrong I think; If this what will happen you won't see it go down at all. That is why It's called it "a bubble"; because you see revenue until the day before it pops.

@James: That is in fact the prelude of any economical crash.

Edited 1 times. Last edit by Alfonso Sexto on 10th April 2015 8:29am

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Dave Herod Senior Programmer, Codemasters4 years ago
It just looks to me like it's just becoming like the triple A console market to me, rather than a crash. All the money going to a handful of "usual suspects", the big companies squeezing out the little ones.
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Paul Jace Merchandiser 4 years ago
"...along with around $1 million as an annual bonus."
What exactly is he being paid a bonus for? For staying another year or for constantly keeping the company in the headlines while he continued to lose them money? Companies really need to redefine what it means to earn a bonus in large amounts of money.
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James Berg Games User Researcher, EA Canada4 years ago
@Alfonso - It's also the prelude to a more mature, AAA-style set of survivors. I'm not doubting a ton of small mobile companies are making great games and still failing financially, but that doesn't necessitate a general crash. Given the amount of attention being paid to it by a much, much broader demographic, I'm not sure it would even be possible for mobile to crash. As the audience grows, more and more niche products have a chance to be created. There won't necessarily be a lot of -different- ones though, as discoverability in the marketplace makes it more likely that a smaller number of games will (more and more) get most of the attention.

It's similar to Steam now- there's /so/ many games, and the race-to-the-bottom with sales, that smaller and middle-sized developers/games are having a really hard time. You're either the next Kickstarter/Greenlight darling, AAA, or you're eating boot leather.
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