When The Money Goes: Zynga Founder Pincus From Billionaire To Ex-CEO

Zynga has made a change in CEO as Don Mattrick, a key executive from Microsoft’s Xbox division, takes the reigns from founder Mark Pincus. Zynga, a social gaming company was a darling of the investment world just about a year and a half ago.  Now, mired in controversies, multiples layoffs, and hundreds of millions in lost revenues, the companies founder and former CEO has finally succumbed to the pressure and stepped aside as Cheif Executive. If anyone is qualified to save this sinking ship it will be Mattrick, who grew the Xbox franchise into the industry leader it currently is against the better established platforms.  But while Pincus is playing nice (it was partly his decision), this story seems similar to Steve Jobs at Apple when he brought in John Sculley from Pepsi. Although the circumstances are different, it probably will end the same, with someone on the outside looking in.

As reported by Cnet.com:

” Mattrick faces a Herculean task of reviving a company whose fortunes have taken a turn for the worse thanks to an exodus of players, fatigue from even its most popular franchises, and, ultimately, a “broken” business model. Moreover, he will have to work with Pincus, whose difficult personality has rubbed insiders and investors the wrong way.

Still, Mattrick raises some hope that Zynga can be exciting — and successful — again. But can the savvy gaming executive, who was heralded as the Xbox‘s savior, really revive Zynga? Or are the challenges too great for even Mattrick’s talents?”

Only time will tell!  But handling the business and the former CEO will be no small task. As pointed out by Forbes.com:

” While some argue that Pincus’ decision to step down as CEO is the right call, Zynga’s challenges don’t disappear with him scaling back his involvement. Because of his  ownership of more than 20 million Class C shares–which carry 70 to 1 voting power to commons shares–Pincus still maintains a 61% voting control over Zynga,  effectively giving him complete autonomy over the company’s decision-making processes.”

And there lies the problem. While the Zynga founder is saying all the right things now, he probably will not be able to relinquish true control in the end. Although wsj.com notes that:

” Mr. Mattrick asked Mr. Pincus if he was emotionally ready to give up the CEO slot, and for assurances that Mr. Mattrick would have the power to make major decisions at the company, said another person with knowledge of the conversations. Mr. Pincus convinced him that he understood the role of the CEO and that Mr. Mattrick would make the final decisions on a day-to-day basis.”

Time will tell how the drama unfolds. The story is some what similar to Apple CEO in his early years with company. A young and abrasive founder seemingly unready to handle the duties of CEO hires an outside superstar to run the company. Same story, only this time when the shake out comes, and it will Mark Pincus will still be running the ship.

Back to top