Former Xbox boss Don Mattrick knew he would be in for a challenge when he took over as CEO of Zynga, but you have to imagine he has days when he wishes he was still back at Microsoft. To get a scope of just how bad things are at Zynga, consider that the company lost 25% of its daily active users over the span of just one quarter. Mattrick isn’t panicking, however, as he tells Forbes that he has a plan to get the Farmville developer back on track. More →
Before Don Mattrick surprised everyone with the announcement that he was leaving Microsoft to join Zynga as its CEO, the former Xbox boss was reportedly interested in acquiring the social gaming company. According to Bloomberg, Mattrick met with Zynga founder and then CEO Mark Pincus in 2010 about Microsoft potentially purchasing the company. Microsoft was reportedly interested in bolstering the Xbox’s social gaming offerings, however negotiations eventually broke down. Since then, Zynga filed for an initial public offering in December of 2011 and has seen its share price decline by more than 60%. To make matters worse, gamers are also spending less time playing the company’s games. Mattrick, who begins his role as chief executive at Zynga on Monday, faces a number of challenges as he looks to turn the company around.
While Wall Street has reacted favorably to Zynga’s hire of former Xbox chief Don Mattrick as its CEO, GigaOM’s Om Malik isn’t having any of it. In a long analysis, Malik makes the compelling case that Mattrick is very unlikely to turn around Zynga’s fortunes mostly because his hiring does nothing to improve the company’s prospects in the mobile world. The story of Zynga’s downfall is well-known: The company initially struck it rich by producing popular Facebook games but has done far less well when it comes to developing mobile games for iOS and Android. Malik believes that the company’s own DNA is still programmed to pop out cheap Facebook games and is thus unlikely to change its stripes for any new CEO.
Don Mattrick surprised everyone on Monday when he announced that he would be leaving Microsoft to become the CEO of struggling social gaming company Zynga. According to a report from Fast Company, the executive left because he was unhappy with an upcoming reorganization of the company. Earlier reports suggested that Microsoft was planning major changes to help solidify its transition from software company to devices and services company. Under the reorganization, Mattrick would oversee a newly created hardware division. He was reportedly upset that he would not be receiving a larger role at Microsoft, however, which spurred his decision to depart the company. The Xbox division will be run by Microsoft CEO Steve Ballmer for the time being, although it is believed that Microsoft Studios head Phil Spencer will eventually take over the position.
A year ago, Zynga spent $200 million to buy OMGPOP, the creator of a popular game called Draw Something. Within 48 hours of the acquisition, Draw Something started dropping down the rankings of the United States app charts. By August 2012, the game that had been No. 3 top-grossing app on the iPhone in early April had dropped out of the top 100 chart. And now Zynga has basically closed down OMGPOP, a $200 million acquisition that turned into dust in 14 months. More →
Soon after its IPO, Zynga’s share price spiked above $15 in early 2012. Very little has gone right since then. Just last month, Zynga issued yet another warning and its share price now hovers just above $3. On Thursday, Zynga’s latest flagship game, Draw Something 2, dropped out of iPhone’s top-10 paid app chart after having spent only six days there. The original Draw Something spent nearly three months on the iPhone’s top-10 chart in early 2012. More →
Zynga (ZNGA), the Facebook (FB) app behemoth, still reigns supreme on its most important platform. But the erosion of its dominant position continues as smaller rivals keep chipping away at its market share. On December 26, Zynga-owned Facebook applications had 267 million Monthly Active Users, down 20 million in two weeks. Far behind it followed Microsoft (MSFT) with 70 million MAU, King.com with 65 million MAU and Instagram with 43 million MAU. More →
Facebook (FB), Google (GOOG) and six other tech companies have petitioned the courts to begin rejecting lawsuits that are based on patents for vague concepts rather than specific applications, TechCrunch reported. The agreement, which was cosigned by Zynga (ZNGA), Dell (DELL), Intuit (INTU), Homeaway (AWAY), Rackspace (RAX), and Red Hat (RHT), notes the only thing these abstract patents do is increase legal fees and slow innovation in the industry. The companies claim that “abstract patents are a plague in the high tech sector” and force innovators into litigation that results in huge settlements or steep licensing fees for technology they have already developed on their own, which then leads to higher prices for consumers. More →
As Zynga (ZNGA) continues its free fall into irrelevancy with layoffs and its one-hit social games, the gaming company has revised its contract with Facebook (FB) to free it from being “forced to launch games exclusively on the Facebook platform” and “obligated to use Facebook Credits for Zynga game pages,” according to AllThingsD. The change of terms filed with the SEC also includes a clause that states “Facebook will no longer be prohibited from developing its own games” on March 31, 2013. Could Facebook start developing its own social games? Theoretically, yes. But would Facebook really jeopardize its relationships with game developers who already make games for its social network? Probably not.
Hackers associated with the group Anonymous have threatened Zynga (ZNGA) for “the outrageous treatment of their employees and their actions against many developers.” The group is angry with the company’s latest round of layoffs, calling them “an insult to the population” and an “end of the U.S. game market.” The Anonymous members plan to release confidential documents it has obtained that suggest Zygna will be moving jobs to more “convenient financial countries.” The group has also said that it unless the company abondons these plans, it will release all the games it has stolen from its servers for free. The group has given Zynga until November 5th, also known as Guy Fawkes Day, to comply with its demands. Hackers inside of Anonymous have previously threatened to attack other companies such as Facebook (FB) although its attempts have been fairly unsuccessful so far.
It’s easy to badmouth the dumb moves Zynga (ZNGA) has made — the disastrous acquisition of OMGPOP, the strip-mining of the Ville franchises, the lack of skill-based games. On Wednesday night, Zynga shares finally rebounded a bit from the brutal swan dive that started right after the IPO. A share buyback program and UK gambling project offered a quantum of solace. Zynga has now sunk so low that even 3% annualized revenue growth comes as a positive surprise to traumatized investors reeling from a string of disappointments. More →
While most of the world was focused on Apple’s (AAPL) press event in San Francisco on Tuesday, Zynga (ZNGA) reportedly shut down its Boston offices and laid off more than 100 employees around the country. The story began circulating on Twitter earlier this afternoon and has since been confirmed by a number of news outlets such as TechCrunch and The Verge. More →
Zynga’s (ZNGA) $210 million purchase of Draw Something OMGPOP is officially a dud. In Zynga’s latest preliminary financial report, the company revealed that its third quarter revenue will be lower than expected, clocking in between $300 million to $305 million and it will report a net loss between $95 million and $105 million. In what can only be an indirect admission that the Draw Something craze is over, Zynga also said it plans to write off between $85 million to $95 million related to the OMGPOP purchase.