|A management shakeup at Zynga: |
Zynga’s Mark Pincus Grabbing Game Oversight from COO
All Things D
August 1, 2012 at 7:00 am PT
Zynga’s Founder and CEO Mark Pincus has begun overseeing the company’s game development as the leader in social gaming scrambles to recover from a disastrous second quarter.
As part of restructuring, David Ko, Zynga’s Chief Mobile Officer, and Steve Chiang, its EVP of games, will report directly to Pincus, according to Bloomberg, which first reported the changes.
Ko and Chiang previously reported to COO John Schappert, one of Zynga’s priciest — and prized — recruits from Electronic Arts.
Bloomberg’s report suggests that Schappert has “lost support within the company and taken some of the blame for underperformance.” But according to sources that spoke to AllThingsD, the situation is more complicated than that.
A company spokeswoman declined to comment.
While at least one source agrees with the assessment that Schappert is in the dog house, other sources say the main purpose of the reorg is to make games work across multiple platforms by prioritizing mobile. That has been challenging for Zynga since up until now it was easy to make increasingly more money on Facebook.
In addition, insiders tell AllThingsD that Ko is now overseeing key game franchises on Facebook — not just mobile. By giving him control over both, that supports the premise that Pincus is serious about helping the two game silos work closely together.
However, it’s unclear what role Schappert is playing now.
As yet another example, sources close to the situation say Schappert is no longer heading up the company’s ad technology, which has been handed off to Cadir Lee, Zynga’s CTO. The list of things that Schappert is responsible for are now relatively small, especially when you take into consideration the size of his paycheck. A year ago in April, when Zynga first lurred him away from EA, his compensation was valued at $42.8 million, according to Bloomberg’s estimates.
Last week, the company wildly missed its internal projections, blaming changes a number of woes including changes made to the Facebook platform. In an interview with Schappert immediately following earnings, he did not let on that a shake-up was underway, and spoke about a wide range of topics, including the company’s future plans.
Yesterday, Zynga’s shares continued to spiral downward, losing another 2 percent to close at $2.95 a share. Since raising $1 billion in a public offering late last year, the company’s stock has fallen more than 70 percent.
It didn’t take long for lawsuits to bubble up, following a cratering of that magnitude. This week shareholders filed a pair of lawsuits against the company, accusing the company of failing to warn about declines in user and revenue growth ahead of last week’s surprisingly weak results. The California suits are seeking class-action status, Reuters reports.