Pincus interruptus: Microsoft's Xbox chief to run Zynga

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Call it with Decisions with Friends. A Halo effect. or ExecutiveVille. Whatever game Zynga’s founder Mark Pincus had in mind, he’s not calling the shots, ceding the title of chief executive to former Microsoft executive Don Mattrick.

Mattrick, who helped make Microsoft’s Xbox game console the dominant game platform within the United States during the last two years, will take over as CEO of the embattled company on Monday, the two companies said Monday afternoon. Microsoft has yet to name a replacement.

Mark Pincus, Don Mattrick
Mark Pincus of Zynga with the company’s new CEO, Don Mattrick.

For Pincus, the move is an acknowledgement that he can serve Zynga best as a product visionary, rather than leading the company outright. Pincus said that his “greatest impact [was] working as an entrepreneur with product teams, developing games that could entertain and connect millions”.

Pincus operated under suspicions that his social networking company would peter out, as user interest waned. Soon after Zynga went public in 2012, investors soured on it. The stock price hit a high of $15 per share in 2012, but had languished in the $2 range until AllThingsD published word of the shift earlier on Monday. The stock promptly climbed, and was trading at $3.02 as this article was posted.

For Mattrick, however, the move comes as he was forced to backtrack on part of his vision for the Xbox One, the game console that Microsoft introduced last month at the E3 show in Los Angeles. Although Mattrick and his team redesigned the Xbox as both a set-top box and a game console, gamers focused on the digital rights restrictions placed on top of used games, including limits on reselling games to friends. Mattrick and Microsoft were forced to retract their stance, making the Xbox One just an improved version of the Xbox 360, with the same digital-rights policy as the older console. That backtrack prompted its own backlash, of a sort.

Steve Ballmer, Microsoft’s chief executive, intimated that Mattrick’s replacement for the Xbox division was waiting in the wings. “The strong leadership team at [Microsoft’s 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,” he wrote in an email to Microsoft employees announcing Mattrick’s departure.

What might we expect from Mattrick’s Zynga?

Under Mattrick, the IEB unit at Microsoft solidly established the Xbox as the dominant gaming platform, and a paid service in and of itself: Microsoft’s Xbox Live service costs $60 annually for a single user, which allows multiplayer capability plus additional services. Sony’s own multiplayer service is free, for now, although its upcoming PlayStation 4 will reportedly require a paid PlayStation Plus membership to access online services.

If Mattrick tries to monetize the multiplayer experience, that would reverse the course of Zynga’s history, which has tried to grow its user base through aggressive marketing, including bonuses and invitations to other players. But Mattrick has to boost profits somehow; Zynga’s earnings before taxes dropped 66 percent to $28.7 million on revenue of $263.6 million in the first quarter of 2013, and users have continued to slide to 52 million daily users and 253 million—after peaking in the third quarter of 2012 at 311 million.

Would it so hard to believe that Mattrick’s first pitch will be to established franchises that he helped cultivate? It’s possible that the future of Zynga may be in sites like Halo Social, a completely unrelated site that nevertheless provides social challenges tied to the Halo franchise. A reskinned Empires and Allies might be an opportunity, as well.

But what we as gamers probably should hope to see is a refocus on games—not knockoffs, not derivatives, but real, original titles, with real, social opportunities. Mattrick hasn’t done any interviews explaining the move, but I wouldn’t be surprised to hear him say that “multiplayer is the original social”. And if you go down that route, something a bit more hardcore could be in the works. Let’s hope so, anyway.

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