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Zynga shares soar as Mattrick takes Pincus’ CEO chair

Wall Street has taken Zynga’s decision to replace its Founder Mark Pincus with a new CEO, Microsoft’s Don Mattrick, rather well. Ever since the development was announced on July 1, 2013 on the company’s blog, and all the press that followed, Zynga’s share price has headed north. The stock that was clocking USD 2.8 on July 1, 2013 picked up by almost 20 per cent to be priced at USD 3.3 on July 2, 2013.

Following this development, Pincus would continue with his role as Chairman and Chief Product Officer for the company.

For many, this is the first step in the right direction from the struggling gaming company that despite its successes such as Farmville has been on the downhill for the past two years. While Zynga has brought someone with the right background on board, the question is how much can Mattrick help the company in being prepared for the dynamic gaming world.

Mark Pincus and Don Mattrick

In Pincus’ words, Mattrick is an entertainment and game industry innovator who’s been making products and scaling teams and businesses for the last 30 years. He had leadership roles at Microsoft, Electronic Arts and Distinctive Software, which he founded when he was 17 years old. In the company statement, Pincus said, “I’ve always said to Bing and our Board that 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.”

According to industry observers, there are three clear challenges facing Mattrick.

The first includes reinvention in a domain that sees a new hero nearly every day. So far, Zynga has been amongst the pioneers in social gaming. But the growth of mobile has made it important to understand multiple devices and the role of an individual in mass gaming. Zynga is yet to see success on the mobile platform where some of its competition has already created platforms that are constantly engaging global audiences.

The second challenge is to break the perception of being a Facebook platform. For many players, Zynga’s best has been on the Facebook platform. While Facebook’s popularity doesn’t make this a bad deal, Zynga’s test would be to be able to deliver engagement on any kind of digital media platform available today because consumers are traversing different platforms at any point. That said, social gaming company King surpassed Zynga in monthly active users on Facebook on July 2, 2013.

The final challenge would be to re-motivate and re-energise the company. Zynga has housed some of the brightest minds of the business but when a company is not doing well, the effect runs deep. Mattrick’s task is as much in the house as it would be outside the house.

In that sense, Mattrick is unique in the game business. As Pincus stated in the company blog, Mattrick can execute in multiple domains – hardware, software and network, and he’s been the person responsible for game franchises such as ‘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.

Mattrick experience gives him the ability to understand the value of a network and the importance of creating lifelong consumer relationships. He turned Xbox into the world’s largest console gaming network, growing its installed base from 10 to 80 million and transformed that business from deep losses to substantial profits. And he has grown the Xbox Live player network from 6 to 50 million active members.

A new game is all set to begin for Mattrick who is already touted by the press as the ‘would be saviour’ for Zynga. Safe to say though, the task ahead, would not be simple.