Zynga Inc (ZNGA)

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Zynga CEO Mark Pincus to Pass Reins to Frank Gibeau
4:05 pm ET March 1, 2016 (Dow Jones) Print

By Sarah E. Needleman

The revolving door at the top of Zynga Inc. is turning again.

The mobile-game maker Tuesday said Chief Executive Mark Pincus is passing the reins to Frank Gibeau, who joined the board in August after more than two decades at Electronic Arts Inc.

Mr. Pincus, who will become executive chairman, said the leadership change was his idea and grew out of a partnership with Mr. Gibeau. "This really happened organically," Mr. Pincus said in an interview. The 50-year-old plans to remain "deeply engaged" in day-to-day operations.

The shake-up, which takes effect March 7, comes within a year of Mr. Pincus returning to helm the company he founded. That move itself was less than two years after Mr. Pincus stepped aside when former Microsoft Corp. and EA executive Don Mattrick became CEO.

Mr. Gibeau, 47, "brings some experience and skill sets we don't have," Mr. Pincus said in an interview. "My DNA is more in social and entrepreneuring," while Mr. Gibeau "has far more depth in terms of running and building game businesses at scale."

Zynga is long past its heyday as the social-gaming powerhouse behind "FarmVille" on Facebook Inc. The company was slow to adapt to casual gamers' migration to mobile apps and fell behind rivals such as King Digital Entertainment, the "Candy Crush" maker recently acquired by Activision Blizzard Inc. for $5.9 billion.

While Zynga has increased its output of apps to compete with the likes of Supercell Oy's "Clash of Clans," it hasn't come close to recapturing its dominance. The company has struggled to stay profitable, and its shares have been stuck below $3 since Mr. Pincus returned as CEO a year ago.

At the time, Mr. Pincus said he planned to get Zynga back "to what differentiated us." He let go of 364 employees--nearly a fifth of Zynga's workforce--and said the company would focus on popular areas such as casino games.

Zynga hemorrhaged users despite the efforts. In its most recent earnings report, the company said the number of people playing its games daily fell 24% to 18 million, while monthly active users fell 30% to 68 million. It said it would put its seven-story San Francisco headquarters up for sale.

Mr. Gibeau, who ran EA's mobile-games division at the time of his departure in May, is tasked with stopping the bleeding. As a board member, he visited Zynga's headquarters about twice a week, working with Mr. Pincus on financial planning and operational strategy.

Zynga attributed its revitalization of "Words With Friends" and success with slots games to Mr. Gibeau's involvement. The focus now, Mr. Gibeau said, is building on these core franchises.

"We were doing too many things, working on way too many games with the resources we had," Mr. Gibeau said. "That was a big exercise we went through."

Even so, Zynga plans to release 10 new games this year. It recently acquired a 65-person studio specializing in slots games. "We're adding head count," Mr. Gibeau said. "We're planning to incrementally and slowly invest and grow in our core areas."

In a proxy filing with the SEC, Mr. Pincus owned 10% of the company but had 64% of the voting control as of March 31, 2015.

Write to Sarah E. Needleman at [e-mail]

(END) Dow Jones Newswires

March 01, 2016 16:05 ET (21:05 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.




Source:

http://www.wsj.com/articles/zynga-ceo-mark-pincus-to-pass-reins-to-frank-gibeau-1456866353