Microsoft Corporation (NASDAQ:MSFT) has been at the top of the home gaming and entertainment market the last several years with its Xbox franchise, one which just launched its latest hardware edition, the Xbox One. While the latest console is getting mixed reviews – with the main complaint is that it’s too expensive for what the device offers – the Xbox franchise has evolved in dramatic ways over the last several years, and much of the credit for the development of Xbox and its console and services falls on the shoulders of the division chief, Don Mattrick.
Zynga Inc (NASDAQ:ZNGA) has been really struggling the last couple of years, ever since its massive stable of social games on Facebook Inc (NASDAQ:FB) got pushed into the background with Facebook’s overhaul of its pages to the Timeline format. Many popular Zynga games wound up getting buried where they were not difficult for users to find, so the number of players and number of games played dropped precipitously, and Zynga was late to recover and adjust. So where and how does Microsoft Corporation (NASDAQ:MSFT) enter into the picture and try to rescue Zynga?
It starts with Mattrick. And as the latest report circulated on the markets Monday that Mattrick was leaving Microsoft Corporation (NASDAQ:MSFT) to become the new CEO at Zynga Inc (NASDAQ:ZNGA), Zynga stock immediately rallied, at one point more than 12 percent over its opening price, clearing $3.10 a share. While Mattrick is considered the main cog in the Xbox wheel at Microsoft – which means some think his departure will be as big a blow to Microsoft as it could be a win for Zynga – it could be an opportunity for him to establish Zynga on mobile, which has been a bugaboo for Zynga over the last year or so. Whether Mattrick can develop mobile when he has been known as a console gaming guy will remain to be seen, but few question his chops in developing gaming experiences for users.
If the market is any indication, Zynga Inc (NASDAQ:ZNGA) seems to have hit a home run with this news, as it seems to be believed that Mattrick’s arrival may be the first big step to rescuing Zynga from gaming oblivion. What will this ultimately mean for Microsoft Corporation (NASDAQ:MSFT), which had Mattrick as the face of Xbox for the last several years? After all, he was the one who was on stage to introduce Xbox One to the world, not CEO Steve Ballmer.
What are your thoughts about this move? Will it hurt Microsoft Corporation (NASDAQ:MSFT) more than it will help Zynga Inc (NASDAQ:ZNGA)? Do you think this will help Zynga at all, and how much benefit will this be to investors like fund manager Ken Griffin (see his portfolio)? Give us your feedback in the comments section below.