Don Mattrick, the head of Microsoft's Interactive Entertainment Business that oversees the company's Xbox division, is reportedly stepping down to take a high-level position at Zynga. According to All Things D, multiple sources have said that Mattrick could be in line for the position of CEO, a move that would mark a major shake-up for both companies involved. While Microsoft is rumored to be in the middle of a major reorganization set to be unveiled today, the timing behind this move is still rather surprising. Microsoft is ramping up for its fall launch of the Xbox One console, something that Mattrick undoubtedly was closely involved in — but it's possible that Mattrick is leaving because of the large amount of PR difficulties that have followed the Xbox One. Microsoft recently had to do an about-face due to a growing chorus of complaints regarding a number of controversial policies for the forthcoming console, including a required online check-in every 24 hours.
The destination is equally curious — Zynga has been dealing with some major challenges, recently closing offices and laying off more than 500 employees. Things are tough from a financial perspective, as well; the company's revenue dropped 18 percent last quarter and audience engagement metrics are down as well. All Things D says that Mattrick will be working closely with current CEO and founder Mark Pincus to revive the struggling company, and a formal announcement could come as soon as today after the markets close. In the meantime, we've reached out to Microsoft for a comment and will update with any news we hear.
Update: Zynga has confirmed that Don Mattrick is taking over as CEO and joining the company's board. Former CEO and founder Mark Pincus will stay on as chairman and chief product officer. Mattrick will start next week, but will be stopping by Zynga tomorrow to do a Q&A with the company's employees.
Update 2: Microsoft CEO Steve Ballmer has sent an email to the company's employees informing them of the transition. Ballmer wishes Mattrick good luck at Zynga, highlights his accomplishments, and touts the company's upcoming Xbox One launch. His full message is below:
Zynga announced today that Don Mattrick would be its new CEO, effective July 8. This is a great opportunity for Don, and I wish him success. Don’s directs will report to me and will continue to drive the day-to-day business as a team, particularly focused on shipping Xbox One this holiday.
Since joining IEB more than six years ago, Don and his team have accomplished much. Xbox Live members grew from 6 million to 48 million. Xbox 360 became the No. 1 selling console in North America the past two years. We introduced Kinect and have sold more than 24 million sensors. We released fantastic games, and, most importantly, we expanded Xbox to go beyond great gaming to deliver all the entertainment people want — sports, music, movies, live television and much more.
In the past month, the IEB team showed for the first time here on our Redmond campus, and again at E3, how we are going to continue to transform entertainment with Xbox One. I am incredibly proud of the work and vision culminating in Xbox One. I'm 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.
Thank you, Don, for setting us on a path to completely redefine the entertainment industry. The strong leadership team at IEB and their teams are well positioned to deliver the next-generation entertainment console, as well as transformative entertainment experiences, long into the future.