Don Mattrick might yet fix Zynga, but Microsoft’s problems are manifold

No longer head of Microsoft’s Interactive Entertainment Business, Don Mattrick is off to Zynga to replace embattled CEO Mark Pincus, who stays on as chief product officer and chairman. For Mattrick, a man who has scaled the corporate ladders of both EA and Microsoft since founding Distinctive Software at 17, it’s probably not a step in the direction he anticipated. For former billionaire Pincus, though, it seemed more inevitable that he’d go the way of his company’s share prices.

At EA, Mattrick was the mercurial figure who turned The Sims from construction game into chart-swallowing virtual soap opera, and similarly refocused FIFA and Madden NFL. Swapping roles with outgoing IEB VP Peter Moore, his tenure at Microsoft saw Xbox finally turn a profit thanks, in part, to a languishing R&D project called Natal, revived by his vision of a platform called Kinect. The Netflix deal, Spielberg, the Halo TV series: you’re welcome. A serial entrepreneur and co-designer of the original Test Drive, colleagues touted him as the exec more comfortable in the studio than the boardroom. It was a quality never quite borne out by the platform’s firstparty games.

It’s one thing to recognise Mattrick’s role in reversing Xbox’s fortunes, but quite another to think his departure solves its problems. The U-turn over DRM may have come from his desk after a series of E3 gaffes, but Xbox One’s problems are manifold. If his successor manages to refreshen the brand at all, or steer it to success in November and beyond, it’ll be despite Microsoft in general.

Indeed, Xbox One is as much a product of Steve Ballmer’s reign at Microsoft, a period in which the CEO has routinely ‘bet the farm’ (a catchphrase destined for his epitaph) on products and directions of drastically varying appeal.

Zynga’s Mark Pincus and Don Mattrick.

Case in point. Just a few months before the ‘Xbox 180′ over DRM, Microsoft’s business and marketing strategy head Tami Reller told the Financial Times that “key aspects” of the maligned Windows 8 would be changed by the upcoming 8.1 “Blue”. Not just that: the company had failed to educate consumers as to why they should suffer 8′s UI overhaul, and had focused too little on the touchscreen PCs suited to it. The Start button and the optical disc, both targeted for premature annihilation, are symbols of a Microsoft that asks customers to pay for its mistakes. Having left others to cultivate the tablet and digital distribution markets, its attempts to set the agenda only shock and confuse.

The seemingly indestructible Ballmer now runs the game division in lieu of Mattrick’s replacement, suggesting a company in the midst of now muddled restructuring. He’s bullish, of course, reminding us that he is “particularly excited about how Xbox pushes forward our devices and services transformation by bringing together the best of Microsoft. The consoles are incredible all-in-one devices with built-in services that consumers love, including Bing, Xbox Live, Internet Explorer, SkyDrive, and Skype. And, just as important, Xbox Games, Xbox Video, Xbox Music and SmartGlass light up Windows PCs, tablets, and phones.” Zynga’s shares jumped 12 percent following news of Mattrick’s arrival; Microsoft’s barely wobbled when he left. Go figure.

At Zynga, meanwhile, Mattrick must repeat his turnaround of the Xbox business from deep in the red. Zynga’s stock price has dropped by two thirds in less than 18 months, and 20 per cent of its workforce has been shed in the last year. Its disastrous purchase of Draw Something creator OMGPOP for $200m in 2012 – the studio was closed within the year – combined with the stagnation of its Facebook endeavours and the rise of mobile, has seen it eclipsed by surging rival King.com. In his first letter to Zynga employees, Mattrick believes it has “yet to realize its full potential.”

“I’ve seen firsthand how powerful franchises and networks can work together to deliver breakthrough value for consumers and drive sustainable growth,” he concludes. “We too, have all the makings of a successful service and business and we have the opportunity to create lifelong relationships with our customers through our high quality products.”

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