Xbox Chief Leaves Microsoft to Become Zynga CEO

Don Mattrick, who has led development of the Xbox video game console for six years as Microsoft's president of interactive entertainment, is leaving the company to become CEO of social media game developer Zynga.

Mattrick takes the helm of San Francisco-based Zynga on July 8, replacing Mark Pincus, who stepped down from the CEO post on July 1, but will remain board chairman and chief product officer.

“Don is unique in the game business. He can execute in multiple domains — hardware, software and network,” says Pincus in a July 1 press release. “He turned Xbox into the world’s largest console-gaming network, growing its installed base from 10 to 80 million and transformed that business from deep losses to substantial profits.”

The gaming industry is an interesting sector for payments. Many games offer in-game purchases of items necessary for reaching higher levels and gaming companies have been experimenting with the ways in which consumers can pay for these items.

For example, Microsoft Points allowed users to purchase funds on stored-value cards in retail stores rather than use a credit card or PayPal account. But Microsoft confirmed the points would be eliminated with the launch of Xbox One.

The move mirrors that of Nintendo and Facebook, which are phasing out their namesake virtual currencies in favor of pricing in real dollar amounts.

Even though Amazon.com just recently announced Amazon Coins, a virtual currency for use on the Kindle Fire tablet, the Coins don’t stray far from its real currency roots with 100 coins worth a dollar.

Legacy payments players have also looked to the gaming industry for help in attracting a younger demographic. With the release of Halo 4 in November, American Express Co. announced it’d be paying cardholders for playing.

Mattrick began his career in gaming at 17, when he started Distinctive Software, which was later acquired by Electronic Arts and became EA Canada. At Electronic Arts, he served as president of WorldWide Studios, helping to develop and scale global game franchises and brands, including FIFA, The Sims and Need for Speed.

The hire could help the social gaming company as it struggles with decreasing customers on its Web and Facebook applications and moving to mobile. Zynga recently laid off several hundred employees and closed its New York and Los Angeles offices. Zynga is the company behind the popular Farmville game.

“In its short history, Zynga has redefined entertainment and brought social gaming to the mainstream. More than 1 billion people across web and mobile have installed Zynga games, and franchises like FarmVille and Words with Friends have become a part of people’s daily lives,” Mattrick says in the release. “I joined Zynga because I believe that Mark’s pioneering vision and mission to connect the world through games is just getting started. Zynga is a great business that has yet to realize its full potential.”

“This is a great opportunity for Don, and I wish him success,” says Steve Ballmer, Microsoft CEO, in an internal email to employees today. “Thank you, Don, for setting us on a path to completely redefine the entertainment industry.”

Those once reporting to Mattrick directly will now report to Ballmer until a new head is chosen.

This year, many companies have lost executives. Verifone lost CEO, Doug Bergeron. Andrew Mason was ousted as CEO of Groupon. And Square Inc. said goodbye to several executives, including chief operating officer, Keith Rabois and co-founder, Tristan O’Tierney.