Zynga founder Mark Pincus is stepping aside again to let someone else run the long-struggling social gaming company.
The company announced Tuesday that Frank Gibeau, a former executive with Electronic Arts, will become its new CEO. Gibeau, who has served on Zynga’s board since August, will take over from Pincus on Monday. Pincus, previously the company’s chairman and CEO, will become the company’s executive chairman.
“Frank has a history of developing strong teams and shipping market-leading games,” Pincus said in a letter to employees that was released to the press. “He has a proven 25-year track record, having helped architect the successful turnaround of Electronic Arts.”
Gibeau has a reputation of getting games completed and released on time, something Zynga needs, said Michael Pachter, a financial analyst who covers the company for Wedbush Securities. He also knows the game industry and mobile gaming in particular, having run EA’s mobile division, Pachter said. And Gibeau will ably fill the role of managing Zynga’s operations, he said.
“I’m a big Frank fan,” said Pachter, who doesn’t own Zynga shares and whose firm hasn’t done recent investment banking business with the company. “Mark needs a guy who can come in every day and run the place.”
But Pincus has tried before to put in place a former EA manager to run Zynga, and neither worked out well.
In 2011, Pincus brought in John Schappert, who previously had been the chief operating officer at EA, to take on the same role at Zynga. With the company beginning its downward spiral, Schappert a year later was stripped of his responsibilities and resigned soon thereafter.
The following year, 2013, amid pressure from shareholders upset about Zynga’s worsening results, Pincus relinquished his role as CEO in favor of Don Mattrick, a longtime video game industry executive who had worked at Microsoft and had previously been EA’s president. Unable to turn Zynga around, Mattrick resigned last April and Pincus, who controls Zynga through ownership of a majority of its voting shares, stepped back into the CEO role.
Pachter was optimistic that Gibeau would work out better than his predecessors.
“Frank is very much a good soldier,” he said.
In the early days of social gaming, Zynga dominated the industry. As recently as 2012, it had more than $1.3 billion in sales. But changes to Facebook’s platform and the shift to mobile games left Zynga flat-footed. By 2014, the company’s sales had plummeted to $690 million.
The company recovered a bit last year, growing sales and cutting losses, but it’s still far below its peak and still posting large losses annually. In a sign of the company’s diminished position, Zynga last week reportedly put its San Francisco headquarters up for sale.
Gibeau worked at EA for more than 20 years. Most recently, he served as executive vice president of the company’s mobile games division, a position he left in May.
In after-hours trading following the news, Zynga’s stock was up 15 cents, or 6.9 percent, to $2.31.
Contact Troy Wolverton at 408-840-4285. Follow him at Twitter.com/troywolv.
