Zynga Missed The Pivot To Mobile, So Can A Veteran Console Exec Revive It?

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Although shares jumped by 10.4 percent today on information that Microsoft’s Don Mattrick is taking over Zynga as CEO, the most vital audience the company should deal with for a genuine, long-lasting turn-around isn’t investors.

It’s the game developer neighborhood.

Because below are the new economics of hit mobile games:

Finland’s Supercell: 100 people. $179 million in revenue in the first quarter, with $104 million in profit.

Japan’s Gung-Ho: 20 staff members servicing the favorite game Puzzle & Dragons. That game alone had an estimated $113 million in profits in April. Those figures are just from Japan, and they’ve about 300 teams.

Compare that to Zynga, which has 2,400 workers, and made just $4 million in earnings on $264 million in income in the first 3 months of this year.

It does not matter if you are publicly traded. Or an ‘Internet treasure,’ which is how creator and former CEO Mark Pincus suches as to refer to his company. Or that the company has near to $1.7 billion in money and short-term and lasting investments on its balance sheet.

The companies that are succeeding on Android and iOS, which is where Zynga wants to branch out, are incredibly lean and operate with a lot of internal liberty.

So what you require is an individual with the charm and social capital to draw in the best game designers, artists and manufacturers on the planet.

Unfortunately, Zynga has actually hemorrhaged so much of its initial skill over the last two years, that it’s unclear if it can recover. There are simply a lot of other lucrative, privately held companies for great talent to go to. On top of that, the very early stories about equity clawbacks then recent layoffs have actually also harmed the company’s credibility as a location to work.

At the same time, the kind of talent that made Zynga successful in the beginning – individuals who provided it the number-crunching, aggressive edge to succeed where older gaming talent did not – are not always right either in this brand-new age. Manufacturing values keep increasing and other competitors have picked up from Zynga’s data-obsessed, detail-oriented method.

Mattrick should turn around Zynga’s track record as an employer. There are absolutely some points in his favor: He was a highly appreciated exec at EA and afterwards went on to run the Xbox division at Microsoft. And it does help that he’s managed the production of content for lots and dozens of different platforms over his three-decade profession. But consoles aren’t where the high-growth chances are anymore.

While his network may provide world-class console talent, it’s not constantly clear that they shift well into games-as-a-service or games on other platforms.

There’s also the potentially politically sticky problem of reporting: Notice how Pincus as main product policeman will have to report to Mattrick as CEO who’ll then report back to Pincus once again as chairman of the board.

So while Mattrick has the huge business, functional experience that might appease investors, it’s unclear yet whether he’ll send the right signals to reverse the outward flow of skill on platforms that really matter for Zynga’s future.