Mark Pincus is stepping down from his role as CEO and being replaced with the former head of Microsoft’s entertainment division, Don Mattrick, according to Bloomberg. Several sources familiar with the situation told Bloomberg that the deal could be announced as early as today, with Mr. Mattrick officially beginning the appointment on July 8th.
It wasn’t long after Zynga announced it would be laying off 18 percent of its staff that fired employees began to speak to the press. But one enterprising ex-Zyngaite decided to circumvent the traditional media route by hosting his own AMA on Reddit.
“What do you want to know about Zynga?” wrote the poster under the handle former_zyngite. ”I’ll try to be as honest and open as possible.” As proof of his identity, the poster included a photo of his layoff paperwork.
Perhaps Zynga New York employees running into traffic was a harbinger of terrible things to come: AllThingsD reports that the social gaming company intends to lay off 520 people–about 18 percent of its total staff–and permanently shutter its New York, Los Angeles and Dallas offices.
Exit This Way
Dan Porter, the former CEO of New York-based gaming company OMGPOP which was purchased by Zynga in March of last year, has left the company, according to a release obtained by Betabeat.
Forget That Fake Money
“Any horse that has the name ‘Awesome’ in it? I bet on it!” Walter Hessert told us earlier this week from inside one of those noise cancel-ish sofa pods in the south wing of General Assembly. Also present in said pod: his brother Thomas Hessert. Along with a third brother (Bill) and their CTO Eric Gay (no relation), the Hesserts are the cofounders behind Derby Jackpot, an addictive online game that almost made Betabeat late for our meeting.
Showing up for an appointment seemed more professional than waiting to see if we’d parlayed the $2 offered to beta users into something more, so we sucked it up and hopped on the N. But it was a heady example of why companies like Zynga are counting on real money gaming to offer real revenue in the otherwise hits-dependent social gaming industry that relies on ad revenue or virtual sheep.
Forget That Fake Money
Both Facebook and Zynga filed documents with the SEC today detailing the terms of a new, more lax partnership. The two-year-old contract between the once interdependent companies–just check out their IPO filings–was slated to expire.
Under the loosened agreement, Zynga is free of a number of obligations, including implementing Facebook credits on Zynga game pages and using Facebook as its exclusive social platform. Naturally Zynga is interested in establishing its own network, with the ability to own its own players and establish its own ad relationships. Zynga also no longer has to display Facebook ad units, for example.
But Facebook also got one (big!) thing: the ability to develop its own games. That might explain why Zynga stock is trading almost 13 percent down after hours.
What’s it take to make a billionaire entrepreneur cry? Low morale, a talent exodus and laggard stock price, according to The Wall Street Journal’s dive into the troubles of Zynga chief executive officer Mark Pincus.
David Wehner is out at Zynga and David Ko is up, as the social gaming company shook up its C-suite in an announcement after stock markets closed.
Mr. Wehner, who’s served as the company’s chief financial officer since coming over from investment bank Allen & Co. in 2010, may have lost Wall Street’s confidence after Zynga’s share price plummeted nearly 80 percent since the FarmVille maker’s IPO at $10 last December.
He’s not the first high-level employee to leave Zynga in recent months, nor have the departures been limited to the top executives: Zynga laid off about 150 employees last month, and it said it would shut down 13 games.
Place Your Bets
After two big blows in succession–downgraded earnings forecasts, followed by 5 percent layoffs and the end of its studios in Boston, Japan, and the UK–Zynga’s third quarter earnings report exceeded the Street’s “rock bottom expectations.” That might explain why after hours trading is currently up 13.6 percent.
Zynga had predicted a net loss of $90 to $105 million for the third quarter, but only reported a net loss of $52.7 million. The company attributed part of that loss on a $95.5 million impairment charge on its acquisition of OMGPOP, the New York City-based makers of Draw Something. Zynga also said that a 28 percent sequential decrease in monthly unique payers (MUPs) from the second quarter (4.1 million) to the third quarter (3 million) as “largely driven by Draw Something.”
Things are not going so hot for Zynga. The company bought Draw Something, and people promptly stopped playing it. Employees are complaining on Quora, and high-level execs are decamping to greener pastures. The stock is, pardon our crassness, in the crapper. Things are so bad over there, it must be enough to make Zuckerberg and Mason feel downright blissful.
Something must be done, and it looks like that something will be the time-honored money-maker of high plains drifters and mob bosses alike: gambling.