There was a buzz. It’s a familiar hum from the Twitter machine of the video game industry where rumors swirl around until one latches onto the side and we collectively watch as it slowly and painfully crawls its way out. And yesterday, we saw more of the same. Don Mattrick would be leaving his position at Microsoft as President of Interactive Entertainment Business (read: Xbox stuff) for Zynga.
Moments like these—perhaps more than any other that the industry encounters—exemplify exactly what it is that makes journalists and writers what they are, which is to say little more than an amalgamation of ego, doubt, and an incessant desire to drink. First the questions were concerning the veracity of the rumor. Most found out from Geoff Keighley, but even he gets things wrong every now and again (it actually and most likely leaked over at AllThingsD). But then, invariably, the dots begin to connect, and questions arise. Calls are made. Mark Pincus, co-founder of Zynga, made a statement.
Pincus made it official: Mattrick would be taking over for him as CEO of Zynga. Pincus had long been pressured by investors to do something—anything—to get the social and mobile game developer back on track. Once a titan that’d gone public (its IPO opened at $11 a share, valuing it at 2004 Google money at $1 billion), the studio recently shut down its Los Angeles, Dallas, Austin, and New York branches, laying off 520 employees, or around 18 percent of its staff. It is currently trading at just over a dollar above its all-time low after a 10 percent bump following the announcement.
Mattrick, seemingly, was also enduring struggles. Six weeks ago, he took the stage to unveil the Xbox One to a tepid reception. It’s not because they showed off a totally incompetent product but because just one month ago, Sony announced the PlayStation 4 and it was ostensibly the better console, an unsubstantiated notion that sent Sony’s stock skyward. Then, three weeks later at E3, Sony stuck it to the Redmond-based company hard by driving home all the contentious points people were hung on: always-online, no used games, etc. Not to mention the substantially lower price.
A week later, however, all of those problems went away. Microsoft’s entire policy had switched. No required Internet connection, no authentication for discs, no regional restrictions. Used games would work exactly how they work now: swap a disc. Mattrick wrote a great deal on it, saying they were grateful for the public’s “assistance in helping us to reshape the future of Xbox One.” That was another banner day in breaking news as people buzzed about and eventually verified Giant Bomb’s Patrick Klepek’s hot scoop.
But only then did we realize what we were losing: account sharing between family members; near-trivial, cloud-based save and game transport; increased graphical and processing prowess due to cloud computing; and so much more. They were exciting and near radical ideas for a console, but people seemed to be upset with the price tag attached to it, which is to say they weren’t happy about being tethered to a cable or router 24/7. We’ve seen how poorly things can go when a network connection is required via Diablo III and SimCity‘s Hindenburg impressions.
Could that have been, though, an ill-placed gut reaction? That seems like a rhetorical, pandering question, but it is sincere. Was Sony’s so-called “victory” at E3 with its hard jabs and pointed elbows more warmly received because it was more familiar? It could be a sign of stagnation—of fear. No one except those up in Washington know how these nebulous concepts of connectivity and cloud shenanigans explicitly work. We fear, after all, what we do not know. Though Mattrick put it a bit bluntly, it is a philosophy worth considering: move it or lose it.
Or it could be justified anger at losing consumer rights. Stripped of its particulars, though, and it operates as a fitting parallel for Mattrick’s transition. Much like we have questions on how and why Sony and Microsoft structured their console infrastructures the way they did, we all have questions regarding this Zynga-Microsoft shake-up. For instance, what influence did Mattrick leaving have on the flip-flop on policies for the Xbox One have? He was, undoubtedly, planning on leaving for quite some time (and well ahead of a holistic company restructuring process), but the switch in stance certainly looks a lot clearer through a “fuck it, I’m out of here” lens. Unsubstantiated or not, it’s a simple answer to a complex question, and those usually have a little bit of truth mushed up in it.
Second, will Pincus be able to relinquish enough control, loosen his grip on the reins enough, to let Mattrick do what they need him to do? Pincus currently earns a $1 annual salary and gets no bonuses or equity awards, so this entire endeavor is one of pride and creative control. Though no longer the CEO, he will still be a chairman and Chief Product Officer and still controls 60% of the voting power with 12% of the company.
Zynga has traditionally be all about micro-payments via Facebook games like CityVille and FarmVille and many other –Villes and things but recently has tried to steer towards mobile development (having your entire money-making scheme tied into someone else’s infrastructure that could—and has—change at any time is never a good idea, something investors are starting to realize), but Zynga is a big ship full of holes. It takes time to point its bow in any new direction. In a seemingly desperate move for faster paddling and new blood, they dropped $200 million last year on OMGPOP and recently let go of most of its staff and closed its offices. They had to update their quarterly projections from $28.5 million to $39 million in losses. They’ve lost 40 million (13 percent) daily active users in the past year.
In the post Pincus put up yesterday, he said that Mattrick would have “the final vote in making decisions on execution” while Pincus would lead “vision and strategy and defining the product experiences.” This, given rumors of how Pincus has a habit of poorly micro-managing and frustrating his fellow executives, doesn’t sound all that promising. BuzzFeed spoke to a few company sources about it, sources that said Pincus could “seriously water down [Mattrick’s] power” and that “I don’t see how Mark can not be involved, he’s got his hands in everything.” That and tumultuous corporate politics could be trouble.
Lastly, where does this leave Microsoft? In the interim, they’ve named Microsoft CEO Steve Ballmer as Mattrick’s temporary fill-in. At least when he left EA in 2007, it seemed like Mattrick gave a two-weeks notice. This move has apparently left Microsoft in a bit of a lurch at a crucial time. In mere months, they will be launching a new console of a new generation in perhaps one of the most heated battles of recent memory. (I expect a Nintendon’t-esque campaign coming from both sides.) How will Ballmer, originally a software man, lead an entire division about hardware and software and PR and putting out Internet fires? He is a veteran executive and leader, sure, but as current CEO, his plate is full enough as it is with Windows 8.
You can possibly cobble together something more in the meantime with the likes of CVP of Marketing Yusuf Mehdi and GM of Microsoft Studios Phil Spencer, both of whom we’ve seen speak about and showcase the Xbox One, but without a single leader to point where to go next, this seems problematic for the Interactive Entertainment division. Do you really want this man telling you how to make a video game console?
There are, of course, other perfunctory and ancillary questions that remain unanswered. Is Zynga at all salvageable? Can anyone possibly turn Microsoft’s cold futurist stance into a winning one? Mattrick could have been muscled out for his “buy a 360” solution, seeing as how former creative director Adam Orth was similarly let go for brutish “deal with it” comments. Most are saying the rumored restructuring wouldn’t have affected Mattrick, but he most likely knows more than we ever will about Microsoft.
If you’re at all interested, there’s a pretty cool profile on Mattrick over at Fast Company. It is illuminating to say the least and brings up some interesting notes (Mattrick will reunite with his old boss from EA Bing Gordon), but it provides none of the answers we want to any of our questions. No time for that, though. I can already hear the Twitter machine spinning up again.