[UPDATE]: Microsoft and Zynga have both confirmed that Don Mattrick is leaving the Xbox maker to become the FarmVille publisher's CEO, replacing founder Mark Pincus in that position. Pincus will remain with the company as the Chairman of the Board and Chief Product Officer. In a note to employees, Pincus explained the reasons for the shift.
"I've always said to Bing [Gordon] and our Board that if I could find someone who could do a better job as our CEO, I'd do all I could to recruit and bring that person in," Pincus said. "I'm confident that Don is that leader."
Pincus said he was particularly impressed with Mattrick's pedigree. Before he was head of Microsoft's Xbox business, Mattrick served as Electronic Arts' president of worldwide studios.
"Don is unique in the game business," Pincus said. "He 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."
As for Mattrick's interest in Zynga, he said, "I joined Zynga because I believe that Mark's pioneering vision and mission to connect the world through games is just getting started. Zynga is a great business that has yet to realize its full potential. I'm proud to partner with Mark to deliver high-quality, fun, social games wherever people want to play."
In a note to employees, Microsoft CEO Steve Ballmer addressed the change.
"This is a great opportunity for Don, and I wish him success," Ballmer said. "Don's directs will report to me and will continue to drive the day-to-day business as a team, particularly focused on shipping Xbox One this holiday...Thank you, Don, for setting us on a path to completely redefine the entertainment industry. The strong leadership team at [Interactive Entertainment Business] and their teams are well positioned to deliver the next-generation entertainment console, as well as transformative entertainment experiences, long into the future."
(The original version of this story appears below.)
Although the news is not yet official, Kara Swisher of AllThingsD is reporting that Don Mattrick, Microsoft's head of the Interactive Entertainment Business, is on his way out. Citing "multiple sources close to the situation," AllThingsD says that Mattrick is close to joining social games firm Zynga. In fact, Mattrick may be working in close partnership with Mark Pincus, becoming the new CEO (apparently meaning Pincus would take another executive role at the company).
"While it is not unusual for a founder to give up such power, it certainly underscores Pincus' commitment to reviving Zynga," says Swisher.
Although there's been much talk of management reshuffling and overall restructuring at Microsoft, this move does not appear to be part of that plan. Of course, it's easy to assume that Mattrick is moving on following the major heat that his Xbox division took after severely fumbling the ball at E3, allowing SCEA boss Jack Tretton to enjoy a massive PR victory. The Xbox One policy reversal may have helped calm the waters, but Microsoft clearly has much PR work to do still in navigating the stormy next-gen seas. Whether Mattrick's moving on is at all related to the Xbox One reception is unclear at this point.
The word is that the news could be officially announced today after the markets close. We'll keep you posted.
As investors catch word of the news, Zynga's shares have been climbing significantly. As of this writing, the stock has climbed 11.5 percent. Microsoft, meanwhile, is trading down slightly (0.25 percent).