Zynga CEO Mark Pincus lets go to make room for Microsoft executive

Moving from one game to another
Moving from one game to another
Image: PRNewsFoto/Microsoft Corp. via AP
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Zynga CEO Mark Pincus is stepping down, to be replaced by Don Mattrick, the head of Microsoft’s Xbox division.

It’s a surprising turn for Zynga founder and current CEO Mark Pincus to set aside his ego and do what’s best for his company.

Mattrick has turnaround experience, and is credited with growing the Xbox user base from 10 million to almost 80 million. Before joining Microsoft in 2007, he was an executive at gaming company Electronic Arts, which is conducting its own CEO search.

Mattrick’s departure from Microsoft and the possibility of him taking over at Zynga were first reported by AllThingsD, and (update) subsequently confirmed by Mattrick himself.

In a sign that investors agree Zynga could use some new leadership, the company’s stock shot up by more than 11% after the report. Before that bump, Zynga shares were down more than 70% since its IPO as it struggled to meet the shift to mobile gaming. Last month, Zynga said it was laying off 18% of its staff to become a leaner and more nimble firm.

Zynga is one of several Interent companies that has faced challenges since its IPO. Earlier this year, online coupons company Groupon fired its CEO and co-founder, Andrew Mason, after its shares plummeted. But Pincus wasn’t expected to be as yielding as Mason, and it had seemed like he could stick around as CEO of Zynga, even with the company struggling.

Zynga shareholders also have little say in how the company is run, including who runs it, because the company’s three-tier stock structure gives Pincus 70 times more voting power than average investors. Any changes at the top would have to come from the Zynga board or Pincus himself.

That’s why it’s surprising—and refreshing—to see Pincus’s willingness to let go of day-to-day control. Perhaps behind the scenes, Pincus was forced to step aside. And perhaps Pincus, who will remain chairman of the company, approved a new CEO to avoid a scenario where things got so bad that the board had to fire him.

But recognizing that you are no longer the right person to lead a firm, especially as a company founder, is not easy. Letting go can be even harder. If Mattrick is able to turn Zynga around, Pincus can take comfort in being able to share in that accomplishment.