In an abrupt changing of the guard, Zynga has announced that chief executive Don Mattrick will step down and founder Mark Pincus will return to lead the company as it struggles to adapt to the changing tastes of gamers.
Sterne, Agee & Leach analyst Arvind Bhatia said the leadership change had sent the "wrong message" because the San Francisco-based company was beginning to move in the right direction under Mattrick.
Mattrick, who Zynga said will receive a US$4mil (RM14.53mil) payout, was given the top job in 2013 to help turn around the company's waning fortunes after it failed to capitalise on the popularity of its FarmVille game with new hits. As chief executive, he focused on accelerating Zynga's mobile game efforts.
Pincus stayed on as Zynga's chairman and chief product officer at the time and relinquished the last of his operational duties last year.
The company said he has requested an annual salary of US$1 (RM3.65) as chief executive officer.
Mattrick, who headed Microsoft Corp's Xbox business before joining Zynga, will also leave the board, the company said.
"I plan to return to Canada to pursue my next challenge," Mattrick said in a statement.
Barclays analyst Chris Merwin said Zynga now needs "to prove they’re able to execute even during yet another leadership transition if they hope to regain investor’s confidence."
Zynga suffered a dramatic reversal of fortune in 2012 as gamers dropped its lucrative, Facebook-based desktop games for mobile offerings from rivals such as King Digital Entertainment, maker of Candy Crush Saga.
Pincus founded Zynga, once one of Silicon Valley's fastest growing companies, in 2007, and the path to recovery has been tortuous. It posted a loss of US$226mil (RM819.2mil) last year and non-GAAP revenue dwindled to US$694mil (RM2.5bil) from US$1.15bil (RM4.17bil) in 2012.
In February, Zynga said it would launch six to 10 new mobile titles this year after it reported bookings of US$182.4mil (RM661mil), about US$19mil (RM68.8mil) less than expected, according to research firm StreetAccount. — Reuters
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