Mark Pincus, the founder of Zynga, is leaving the once hot social gaming company as its new leader seeks a turnaround. Zynga said that Pincus decided to give up all operational responsibilities at the company, though he will remain its chairman and largest shareholder. Nearly a year ago, Pincus stepped down from the role of CEO when Zynga hired Don Mattrick, a longtime game industry executive, to replace him.
Since then, Pincus served as chief product officer.
“Over the past 10 months it has been great to work with Don and you all to reshape our company for the future,” Pincus wrote in an email to Zynga employees, adding that the effort to transform the company is still in its “early stages.”
The departure of Pincus is another sign of how dramatically Zynga’s fortunes have changed in recent years…
Founded in 2007, the company became the hottest of a new breed of game startups. Before anyone else, Pincus figured out how to use the exploding growth of Facebook to create games that spread like wildfire across the social network. For a time, Zynga pumped out hit after hit, from “Farm-Ville” to “Mafia Wars.” Most people never paid a nickel to play the games, but enough did, spending a dollar here and there to speed up their progress in the games and decorate their characters. As a result, Zynga’s revenue grew rapidly.
That growth has recently ended and Zynga has struggled to reproduce its early success as more game-playing shifts to mobile devices. After a period of rapid expansion, the company has discontinued some games and laid off hundreds of employees. In an earnings release on Wednesday afternoon, Zynga reported a loss of $61.2 million, or 7 cents a share, for the first three months of the year, compared to a profit of $4.1 million during the same period in 2013. Its revenue has dropped 36% to $168 million.
The company’s shares rose nearly 6% in after-hours trading, following the news. “We have established a strong base for 2014 and believe we are pacing well for a year of growth,” Mattrick said. Check out the whole letter in the link below.
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