Microsoft Xbox Chief Mattrick to Take Zynga Reins

Microsoft (MSFT) Interactive Entertainment president Don Mattrick is the new president at Zynga (ZYGA), the troubled online social gaming developer.

In confirming an earlier AllThingsD report on Mattrick’s hiring, Zynga also said that founder and chief executive Mark Pincus, who, with 60 percent voting control, has helmed the company since launching it in 2007, will continue as Zynga’s chairman and chief product officer. According to the report, Pincus is said to have concluded that the company, which has floundered since its 2011 IPO, including a recent spate of layoffs and office closings, needed a seasoned executive to run the show while he slid over to building popular games, a sentiment he also expressed in a blog post.

“As I reflect on the past six years, I realize that I’ve had the greatest impact working as an entrepreneur with product teams, developing games that could entertain and connect millions,” wrote Pincus. “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. I’m confident that Don is that leader.”

Mattrick will sit in his new chair starting July 8, and will also take a seat on the company’s board.

“Don is unique in the game business,” Pincus said, in a statement. “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.’ He’s one of the top executives in the overall entertainment business and he’s a great coach who has inspired people to do their best work and build strong, productive teams. He deeply understands the value of a network and the importance of creating lifelong consumer relationships.”

For his part, Mattrick said he “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.”

Mattrick, who joined Microsoft in 2007, for the past three years served as president of the vendor’s Interactive Entertainment Business, overseeing Xbox growth some 700 percent to more than 75 million consoles. Previously, he served as Electronic Arts’ (EA) Worldwide Studios vice president during a 15-year tenure at the game maker. In 1991, EA acquired a company Mattrick founded at age 17 called Distinctive Software.

Aside from navigating the company with an eye toward Pincus’ input, Mattrick will immediately be waist-deep in executing a plan to uplift Zynga to profitability. In its most recent quarter, the company’s revenue slid 18 percent year-over-year to $263.6 million, with a 22 percent slippage in online game revenue to $229.6 million not balanced out by a 21 percent increase in ad sales to $34 million. Zynga earned $4.1 million for the quarter, a notable turnaround from the year earlier $85.4 million loss.

In June, Zynga laid off 520 people, or 18 percent of its workers worldwide—a move expected to be completed later this summer, and, along with closing some offices, one the company figures will save it up to $80 million. Zynga projects to lose up to $39 million in Q2 2013.