In Major Hire, Zynga Confirms Xbox Head Don Mattrick as New CEO, Taking Over From Mark Pincus

As AllThingsD reported earlier today, Zynga confirmed that it has hired Microsoft’s Interactive Entertainment President Don Mattrick as its new CEO.

In a press release, the San Francisco online social gaming company — which has had a turbulent record since its late 2011 IPO — said that current CEO and founder Mark Pincus will continue as Zynga’s chairman and chief product officer.

The 49-year-old Mattrick, who begins next Monday, will also join the company’s board.

The hire is significant for Zynga, which has been hit by a series of problems since its IPO. Pincus has been struggling to move the company into mobile quickly, as its once strong Web and Facebook consumer business has waned. That has included a recent round of layoffs, as well as closures of a number of offices outside of its San Francisco HQ.

This is a major step by Pincus, who has held the top job there since the company’s founding. While it is not unusual for a founder to give up such power, it certainly underscores Pincus’ commitment to reviving Zynga.

In a blog post about the move, Pincus wrote, “if I could find someone who could do a better job as our CEO I’d do all I could to recruit and bring that person in. I’m confident that Don is that leader.”

Pincus’s cooperation was indeed key in the hiring, said sources. It would have to be: He has 61 percent voting control in Zynga, which he founded in 2007. Sources added that Pincus has lately come to the conclusion that the company needed a top manager as CEO, so that he could focus on creating hit games and other products.

Pincus had only half-heartedly tried that before, hiring Electronic Arts exec John Schappert as COO. But he, as well as a number of top execs, stepped down last summer. Pincus has tried a reorg of the company, but the Mattrick hiring is his most dramatic move to date and one that was also pushed by Zynga’s board.

“Don is unique in the game business,” said Pincus in a statement. “He deeply understands the value of a network and the importance of creating lifelong consumer relationships.”

Said Mattrick: “I joined Zynga because I believe that Mark’s pioneering vision and mission to connect the world through games is just getting started. Zynga is a great business that has yet to realize its full potential.”

Mattrick has been at Microsoft for a half-dozen years, after working for 15 year at Electronic Arts, including as president of its worldwide studios. He came to EA after it bought Distinctive Software, which Mattrick founded at 17 years old.

According to his company bio, “since Mattrick began overseeing the Xbox division, the Xbox 360 installed base grew from 10 million to nearly 80 million worldwide while Xbox Live membership increased from 6 million to nearly 50 million.”

But numerous sources said Mattrick has been looking to leave Microsoft for some time, a desire that has deepened as CEO Steve Ballmer has been contemplating a major restructuring that could separate software from hardware across all its businesses. In some configurations, that would have put Mattrick at a disadvantage.

Mattrick has also been on the short list of the top execs being considered to run EA, another gaming giant that has faced a number of challenges and whose former CEO was ousted a few months ago. According to sources, the company is still looking at many candidates and some of its own board members are interested in the job.

Microsoft does not currently appear to have a successor to Mattrick as yet, but that might be moot until Ballmer’s new reorg of the Redmond, Wash., tech giant is complete.

Despite the success of Xbox, Mattrick has presided over some recent high-profile missteps around the flagship device.

As the interactive entertainment boss, Mattrick has been a public presence at both of Microsoft’s recent Xbox One events — the nationally televised unveiling in May and the E3 update in June. Gamers disappointed with the lesser focus on games at the May event blasted execs like Mattrick in numerous online grumblings (and worse over other issues — Francis is really pissed! So is this guy, who is quite verbal about it, too.)

At E3, Sony won the image battle by reaffirming its old DRM policies vs. the Xbox’s new ones, which had angered some gamers by requiring regular online connectivity. After E3, Microsoft abandoned its new digital check-in plans and reverted back to its old DRM policies, too.

While some of the more vocal gamers are now pointing to these issues as part of the reasons for Mattrick’s departure, it does not appear to be the case.

Zynga shares rose about nine percent today, after ATD posted on the Mattrick hire.