Microsoft Loses One to Zynga
Microsoft has received its fair share of negative publicity within the gaming industry recently, following its controversial plans for the Xbox One that it was forced to promptly backtrack on. Microsoft entertainment and gaming chief Don Mattrick has been the public face of that backlash, defending the company's stance while also announcing the quick about-face.
AllThingsD is now reporting that Mattrick is preparing to leave Microsoft, but it's not clear if the Xbox controversy played a role in that decision. Today also happens to mark the day that Microsoft was expected to revamp its organizational structure, a separate storyline also initially covered by AllThingsD. However, Mattrick's departure is supposedly unrelated to the restructuring.
Mattrick's possible destination is none other than beleaguered social gamer Zynga . Mattrick and Zynga have allegedly been in talks for quite a while, and Zynga is in desperate need of someone to lead a turnaround. Mattrick could potentially be taking the CEO spot from Mark Pincus. Rival game maker Electronic Arts has also been looking for a new CEO following John Riccitiello's resignation in March, and Mattrick was also a top candidate for that C-suite spot.
Microsoft doesn't immediately have a replacement lined up, which may be disconcerting for investors, given that the Xbox One launches in just a matter of months. This holiday season will be crunch time for game console manufacturers, as new generations only come around every seven to 10 years, and Sony emerged from E3 as a clear favorite before Microsoft's change of heart. Traditional gaming consoles are under pressure, too, as disruptive devices like the Ouya start to take off.
Zynga investors are certainly excited about the prospect, as shares promptly soared by as much as 13% on the reports that Pincus' reign may be at an end. Even if Mattrick does become Zynga's new CEO, Pincus will still retain much of his power, though. Pincus would likely remain as chairman. He does happen to still control 61% of all voting power, thanks in large part to his supervoting Class C shares that get 70 votes per share and that only he holds.
Could Mattrick lead Zynga back to glory?
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The article Microsoft Loses One to Zynga originally appeared on Fool.com.Fool contributor Evan Niu, CFA, has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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