Zynga founder Pincus stepping down as chief product officer, will remain chairman; Stock jumps
NEW YORK (AP) -- Online game maker Zynga's founder Mark Pincus is stepping down as chief product officer, less than a year after he was replaced as the company's CEO, as the company's sales slide.
Zynga said Wednesday that Pincus will remain chairman of the company he founded in 2007.
Zynga went public in 2011 on the strength of games like "Farmville" and "Mafia Wars," which had enthusiastic Facebook followings. But then rival digital game makers invaded Facebook and more people migrated to other pastimes on smartphones. Zynga has been cutting jobs and posting losses.
The company is trying to shake things up. Don Mattrick, who had been in charge of Microsoft's interactive entertainment division, replaced Pincus as CEO in July. Zynga agreed to buy NaturalMotion, the company behind the hit mobile games "CSR Racing" and "Clumsy Ninja," in January.
Pincus giving up his operational role was a needed change for Zynga and "a huge endorsement" of Mattrick's leadership of the company, said analyst Michael Pachter of Wedbush Securities.
Pachter also said Zynga's guidance was good, and shares rose nearly 6 percent in aftermarket trading.
The San Francisco-based company announced several new executive hires on Wednesday. They include Alex Garden of Microsoft, who is now the president of Zynga Studios. Garden had been in charge of Xbox Live and Xbox Music, Video and Reading.
Including charges connected to job cuts and the closure of some data centers, Zynga said it lost $61.2 million, or 7 cents per share, in the first quarter. A year ago it earned $4.1 million and broke even on a per-share basis. Zynga said it lost a penny per share if one-time items are excluded, matching analyst expectations.
And its revenue continued to decline, dropping 36 percent to $168 million. Analysts had projected an even worse drop, to $164.2 million, according to FactSet.
The company said it had 28 million daily users in the first quarter. That's down by almost half from a year ago, but is up by 1 million users compared with the fourth quarter. Zynga also raised the low end of its annual forecasts for bookings, a precursor to revenue, and for an adjusted profit measure.
Pachter said Zynga's first-quarter bookings were better than Wall Street expected and its second-quarter guidance is also good, suggesting the company could meet its outlook for 2014.
Shares of Zynga jumped 25 cents, or 5.7 percent, to $4.67 in aftermarket trading. The stock had dropped 3.1 percent to $4.42 in regular trading Wednesday. It's up 39 percent over the past 12 months.