Zynga Founder Mark Pincus Back As CEO

(RTTNews) - Zynga Inc (ZNGA) on Wednesday said its Chief Executive Officer Don Mattrick has resigned, and that Co-founder and Chairman Mark Pincus has returned to that role.

The announcement hurt investor sentiments, sending shares of the struggling social games developer down 10 percent in after-hours trade on the Nasdaq.

Zynga, while not disclosing any reasons for Mattrick's exit, said he would quit from the company's board as well.

"I believe the timing is now right for me to leave as CEO and let Mark lead the company into its next chapter given his passion for the founding vision...," Mattrick said. He indicated plans to return to Canada to pursue his next challenge.

On his return as Zynga CEO, Pincus will receive an annual salary of $1 at his own request. Pincus owns about 10 percent of Zynga and 60 percent of its voting rights.

A pioneer of the social gaming industry, Pincus founded Zynga in July 2007 and was CEO until July 2013, when he made way for Mattrick so that he could focus on its creative strategy. And in April 2014, Pincus stepped down as Zynga's chief product officer to don the role of chairman of the board.

Under Mattrick, the former head of Microsoft's Xbox unit, Zynga appeared to show some semblance of optimism, having acquired the U.K.-based studio NaturalMotion, and drastically cut jobs and redesigned games such as "FarmVille" and "Words With Friends" for mobile devices.

But as hard as he tried, Mattrick's efforts to turn around Zynga faltered and its stock price was under constant pressure, forcing analysts to question the company's business model.

Zynga, known for PC games like "Farmville", generates most of its revenues from the virtual-goods purchases made by online gamers and through ads.

But its user base waned as gamers shifted to mobile devices, and Zynga has strived to come out with better mobile games for tablets and smartphones.

In February, Zynga reported a loss for the fourth quarter that widened from a year ago, as expenses overshot revenues. The company also provided a soft first-quarter guidance.

At the time of its going public in December 2011, Zynga stock was priced at $10, and reached $14.50 in March 2012, but thereafter dropped relentlessly.

On Wednesday, Zynga closed at $2.90, up $0.10 or 3.57%, on a volume of 43.5 million shares on the Nasdaq. In after hours, the stock dropped $0.31 or 10.69% at $2.59.