Frank Gibeau Becomes Zynga CEO
MARCH 3, 2016 • Former Electronic Arts, Inc. executive vice president of EA Mobile, Frank Gibeau, has signed on to become the next chief executive officer of Zynga Inc. He has been on Zynga’s board last fall. Mark Pincus is stepping down from the CEO post he reclaimed in April of last year when Don Mattrick suddenly departed the company, and continues on as executive chairman. In an interview with technology site Re/code, Pincus and Gibeau characterized their roles moving forward as a partnership when asked if Gibeau was brought in to oversee operations while Pincus maintained control over content. Gibeau said his role is to frame strategy, increase operational excellence and collaborate. Zynga overhauled its content model and has actively been changing its content focus to mobile platforms since 2012, and Gibeau’s prior responsibilities at EA Mobile are complementary. Zynga expects to release 10 titles in 2016.
Impact: After years of restructuring, cost cutting and quality strides with its mobile content, Zynga has stabilized its ailing financials – even beating financial analyst estimates with bookings of $182 million for its fourth fiscal quarter. The company entered its IPO at $10 per share in 2011, reached $15 share in March of 2012, and now sees shares trading at just over $2. And last month, Zynga put its San Francisco headquarters on the real estate market for sale. Gibeau certainly adds a steady hand at the tiller, yet some investors likely desire a radical departure from Zynga’s current strategy instead. Zynga rose to prominence by arriving on Facebook and churning out a procession of play-alike games to a captive audience. Social network competition such as King and mobile games drawing away multitudes of players torpedoed Zynga’s business model. Not only was the firm forced to revamp its business model, it also had to change its culture – a big reason for the investor pressure that saw Pincus step down from the chief executive’s chair the first time in July 2013 following the hire of Mattrick.
As we said last year, neither Pincus nor Mattrick was able to bring a dominant mobile title to market in the style of Clash of Clans. Instead, Zynga is leaning heavily on its Slots and Words With Friends franchises. Sadly, we don’t expect much of a change with the arrival of Gibeau. Pincus still retains controlling ownership in the company, and neither did EA manage to release a blockbuster mobile title under his tenure. The publisher collects serious revenue on its tried-and-true game franchises such as Madden, The Sims and The Simpsons as a group, yet has yet to break through with a unique mobile IP. Therefore, we do not have high hopes for a major turnaround.