Mark Pincus has once again stepped away from the CEO job at Zynga.
Frank Gibeau, former president of Electronic Arts and a board member at Zynga, will take the reins of the troubled online video game company. Pincus will continue to serve as executive chairman of the board.
The executive shake up comes as Zynga continues to sputter after failing to create new hit games after achieving early success after Pincus founded the company in 2007. After a successful initial public offering five years ago, the company’ shares have tumbled more than 85%, making the company a cautionary tale for tech industry hubris.
“I recruited Frank seven months ago to become an active board member to advise and coach our teams,” Pincus said in a statement on Tuesday. “Frank has mentored product teams, led roadmap meetings and delivered inspiring talks to our game making and PM communities. Frank has also been a big supporter of our move to smaller more nimble teams. Equally important, we have worked well together and share a common vision for Zynga around mobile and social gaming.”
Pincus served as CEO until 2013, when he stepped aside amid mounting troubles. He was replaced by Don Mattrick, who shocked the video game industry by leaving his position as president of Microsoft’s gaming and Xbox unit for the job.
Mattrick abruptly left Zynga in April, paving the way for Pincus’ return to the helm. But after one year, and little progress, Pincus has stepped down a second time.
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Gibeau’s appointment—and Pincus’ departure—raised investor optimism for a turnaround. The company’ shares (ZNGA) rose nearly 8% in after hours trading to $2.33.
A 20 year veteran of EA, Gibeau served as head of EA Games, where he helped develop some of its biggest franchises, like Battlefield, The Sims, and Madden and later great the company’s mobile division into one of EA’s biggest units. He was considered by many to be the favorite for the CEO role when John Riccitiello left that company in 2013, but he was ultimately passed over.
While at EA, Gibeau showed a special enthusiasm for wearable products including virtual reality as well as mobile, which he could carry over to his new job.
“Mark and I believe that the full promise of Zynga and social gaming has yet to be fully realized,” Gibeau said in an email to Zynga staffers. “We believe that Zynga has an opportunity to create new social experiences to connect even more players together. Reaching that potential and fulfilling our mission to connect the world through games is what drives us. While we’re not yet the company we aspire to be, it’s clear to me that Zynga has significant strengths that it can thrive on.”
He faces an uphill battle. Zynga’s earnings have regularly disappointed investors. Just last month, the company adjusted first quarter guidance below what analysts had expected. Zynga now says adjusted revenues will come in between $150 million and $165 million compared with Wall Street’s expectations of $172.3 million.
“They’re just disinterested,” Michael Pachter of Wedbush Securities said in an analyst’s note about investor pessimism around the company. “Zynga has been a ‘show me’ story for so long, many investors have stopped paying attention.”