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.
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.