Is Don Mattrick Zynga's would-be savior?
The Xbox executive faces a Herculean task of tossing the social-gaming company a lifeline, and risks getting dragged down himself.
Veteran video game executive Don Mattrick faces his toughest level yet.
On Monday, Zynga said it had tapped Mattrick as its new CEO. He will take over for Mark Pincus, the controversial founder and current CEO of the embattled social-gaming company.
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?
"A lot of people like him. He's straight -- he's not a devious guy. There's no agenda. What you see is what you get," Wedbush analyst Michael Pachter said. "I think as far as leading the organization, he'll be great. But it'll be a tough turnaround. Zynga's business is not growing."
Wall Street is pleased, but it may be more that investors never warmed up to Pincus. Shares rose more than 10 percent on Monday after the announcement, and rose another 5.7 percent on Tuesday.
The knee-jerk enthusiasm, however, is no indication of the very real hurdles Mattrick faces.
A broken company
If Mattrick is going to save Zynga, it won't be quick or easy.
He will have to deal with the aftermath of a company that grew too big, too quickly. It rode high on the success of social games like Farmville, but over the years, its players began to grow weary of the repetitive gameplay. It was coupled with accusations of unoriginality and several bad bets on games that flopped.
The company's strategy in the last year has been to trim the fat by, and in hopes of keeping loyal players interested.
Although Pincus has, there's been no large-scale effort to address the issue (publicly, at least. It's unclear what Zynga has in development). Industry observers say the company needs to produce more games that target young men, some of the most avid gamers in the industry, including more combat-style games. Zynga is also .
Mattrick will also have to overcome a poisoned corporate culture. Pincus has, most notably former COO John Shappert, .
Pincus will stay on as chairman of the board and chief product officer for the company, which could mean trouble for Mattrick and Zynga.
"As a result, it is not clear how much operating room Mattrick will really have. If there are personality clashes between the two, it could worsen the situation at Zynga," Doug Creutz, analyst for Cowen and Company, wrote in a report.
But, Mattrick may be ahead of the game in that department. Just having Pincus pursue someone to take over his own seat is a sign that the controlling founder is ready to loosen his reins, according to Pachter.
"It's a big acknowledgement," he said. "I think he's stepping aside and letting someone else be CEO, I think that's sincere. It's important that Pincus get out of the way and let Mattrick lead."
Track record of success
Zynga is hoping Mattrick can pull off the same trick he played at Microsoft, when he helped make the Xbox 360 the top-selling console in the current generation.
Pachter said he has no doubt Mattrick will make the company profitable by further downsizing the staff. And, he will probably bring in some new talent to his inner circle at Zynga, like he did at Microsoft, where he thrived.
While running Microsoft's Interactive Entertainment Division, Mattrick was responsible for the development of the Kinect and the recently-launched Xbox One. Before that, he was at EA, helping to create popular gaming franchises like FIFA, The Sims, and Need for Speed.
Growing Zynga's stagnant business will be a different challenge, entirely. Mattrick, a demanding yet well-liked figure in gaming, has had several successes tucked under his belt, but no experience in social gaming, Zynga's bread and butter.
Mattrick's background, however, could make Zynga's offerings much more exciting, Pachter said. Under new leadership, the company could finally get away from its strategy of copying hit games or offering incremental improvements to its existing franchises. That includes a potential move to player-versus-player games instead of collaborate "playing-with-dolls games," Pachter said.
Zynga may be able to start moving into games that are geared toward hardcore gamers, an area that is already dominated by its nimble competitors at companies like Kixeye, Kabam and Supercell -- all of which are moving quickly on the mobile gaming front.
It's a lot to take on for Mattrick, who could have stayed at Microsoft and, reportedly, headed up a newly created hardware division. But, reports have said Mattrick had set his sights higher up the chain so he decided to start looking for a CEO job instead. There was speculation that he would land at EA again, but it seems the challenge of righting a wayward ship was more appealing.
For his part, Mattrick has told Zynga employees he's excited. He sees the mass appeal of social gaming as an opportunity and notes that 1 billion people have installed a Zynga game.
"I've admired Zynga for years. You have redefined entertainment and brought gaming to the mainstream," he wrote in a note to the staff shortly after the announcement of his appointment.
It's not a bad position for him to be in -- just ask Yahoo CEO Marissa Mayer, whono matter what move she makes. If Mattrick fails, people will see it as Zynga's inevitable fall. But if he pulls it off, he'll come out a hero.