Xbox One: "The buck stopped with Mattrick"
Analysts weigh in on the strange timing of Don Mattrick's departure and how the move to a "troubled" company like Zynga is "unfathomable"
The rumor that spread like wildfire was quickly confirmed today, as social games company Zynga happily announced Don Mattrick as its new CEO. The news comes not long after Microsoft made a complete reversal on its restrictive Xbox One policies, causing some industry analysts to scratch their heads.
"The timing seems awful to me. I could see Mr. Mattrick departing for greener pastures a year after the Xbox One launches, but to exit 5 months before the new platform arrives strikes me as strange," IDC research manager Lewis Ward told GamesIndustry International.
"I think this news will make some revisit and question the wisdom of the entire Xbox One strategy, at least among those who follow console platforms closely," Ward continued. "One can only assume MS performed an internal review of how the Xbox One chose its misguided DRM and connected console strategy (before the post-E3 'Xbox 180') and found the buck stopped with Mattrick."
"it's hard not to read this departure as a referendum on the current status of Xbox One, and Microsoft is clearly looking for a new direction"Lewis Ward
"Xbox has otherwise been on a tear for the past 2 years and appears reasonably well positioned for growth. Perhaps some reason related to the broader Microsoft reorg will come to light in the next few weeks but it's hard not to read this departure as a referendum on the current status of Xbox One, and Microsoft is clearly looking for a new direction."
Strange as the move may be, some actually believe it will be good for Microsoft. Independent analyst Billy Pidgeon noted, "Microsoft's turnaround on the initial digital policy for Xbox One provided a great opportunity for Don Mattrick to leave. Microsoft can announce a new Xbox business leader and the executive shift will play as part of the strategic change for Xbox One without much negative effect on the impending launch."
EEDAR's Jesse Divnich believes things will be just fine for Xbox post-Mattrick as well. In fact, Divnich thinks that Mattrick deserves more credit for having the courage to reverse the Xbox One policies.
"Don's been an industry pioneer and a key catalyst to Microsoft's success in video games. He's leaving behind a well-crafted and very skilled team of executives that are perfectly capable of carrying the torch," he commented. "It can take months from initial engagement to when an executive decides to leave a company to join another. Any near-term events were probably unrelated to his decision, but we'll truly never know."
"The fact that Don and the Microsoft team took an active listening approach to their consumers and reversed key business policies as quickly as they did speaks a lot to Don's integrity and work ethic. A lesser person may have kept these issues unresolved or passed them along to his successor or subordinates... I don't think anyone anticipates Don's departure to impact the Xbox One's launch."
"turning Zynga's fortunes around may be even beyond the talents of Don Mattrick, as Zynga has so badly squandered a strong position"Billy Pidgeon
Analysts also had mixed opinions on Mattrick's new role as Zynga's boss. Lewis Ward was flat-out shocked. "Going to Zynga?! This is worthy of an SNL segment, 'Really?!? with Seth Meyers'. Why would Mattrick leave Xbox for a troubled company like Zynga?! I can see why Zynga would want him but why Mattrick would want to climb aboard what might generously be described as a ship that's taking on water like Zynga is unfathomable to me," he stressed.
Pidgeon wasn't much more optimistic, believing that Mattrick may be facing a huge uphill battle at a social company that's been dealing with its own upheaval. "Having Don Mattrick replace Mark Pincus will be good for Zynga in the short term. Don's talent, experience and connections would make a huge difference at most game companies, and hopefully he can help transform Zynga. However, turning Zynga's fortunes around may be even beyond the talents of Don Mattrick, as Zynga has so badly squandered a strong position in the free-to-play social sector they initially owned regionally and the company has failed to compete strongly in the mobile sector," he said.
RW Baird's Colin Sebastian has a slightly more positive view, but he's not denying the challenges that Mattrick will face at Zynga. He called Mattrick a "good catch" and "a positive development for Zynga."
"Overall, we view the appointment of Microsoft executive Don Mattrick as the new CEO of Zynga as a positive development for the company, given his industry and street credibility and experience building platforms and networks. While there was broad speculation that Mr. Mattrick was a candidate for the EA CEO position, we believe his close relationships with Zynga board members and desire to focus on mobile game development likely played some part in this decision. In our view, Zynga still faces execution challenges in a pivot from social to mobile, although now with a more credible leader at the top," he said.
"While Mr. Mattrick's relative lack of experience in mobile may be an Achilles heel, we believe his experience building networks and platforms at Microsoft should still help Zynga in pivoting away from Facebook... While there are precedents for Internet businesses run successfully by co-founders (e.g., Bezos at Amazon, Page at Google), we were increasingly wary about Mr. Pincus' balancing act between a long-term strategic vision and the company's short-term execution challenges. We also note one potential risk will be the ability for Mr. Mattrick and Mr. Pincus to agree on strategic priorities and decision making."