Xbox President Don Mattrick leaving Microsoft to become Zynga CEO [updated]

FURTHER UPDATE (July 2): Develop reports that Microsoft CEO Steve Ballmer will be overseeing the Xbox division temporarily following Mattrick’s departure. “Thank you, Don, for setting us on a path to completely redefine the entertainment industry,” Ballmer resportedly said in a message to employees. “The strong leadership team at [the Interactive entertainment Business group] and their teams are well positioned to deliver the next-generation entertainment console, as well as transformative entertainment experiences, long into the future.”

UPDATE: Zynga has confirmed this report in a press release, saying Mattrick will take over for Pincus as CEO on July 8. Pincus will remain with the company as chairman of the board and chief product officer.

“Don is unique in the game business,” Pincus said in a statement. “He can execute in multiple domains—hardware, software, and network, and he’s been the person responsible for game franchises like Need for Speed, FIFA, and The Sims. He’s one of the top executives in the overall entertainment business and he’s a great coach who has inspired people to do their best work and build strong, productive teams. He deeply understands the value of a network and the importance of creating lifelong consumer relationships.”

ORIGINAL STORY (July 1)

When Microsoft first unveiled its Xbox One in May, it was Microsoft President of Interactive Entertainment Don Mattrick who took center stage for the reveal. Now, less than two months later, the Wall Street Journal is reporting that Mattrick will be leaving the company and heading to a top position at social gaming giant Zynga. Mattrick may even arrive as Zynga’s new CEO, replacing founder and current CEO Mark Pincus. While the move is not official and is only based on “multiple sources close to the situation” for the time being, WSJ says an announcement could be coming as soon as this afternoon.

This high-profile departure so soon after Microsoft’s major PR offensive for the Xbox One (and so soon before the launch of that console) does not exactly project confidence on the company’s part. However, Mattrick did recently get in hot water with some gamers. During a televised interview, he said that players who couldn’t get Internet connectivity could still buy an Xbox 360 rather than an Xbox One. Of course, that was before Microsoft changed its mind about a variety of licensing and connectivity requirements for the Xbox One, a turnaround that was announced to the world via a statement by… Don Mattrick.

Mattrick joined Microsoft in 2007 after serving as president of Electronic Arts for a number of years. He took over the position from Peter Moore, who ironically went on to serve at EA Sports and eventually as chief operating officer for the major publisher.

Zynga has had its fair share of problems of late, from multiple rounds of layoffs and executive departures to the shutdown of studio OMGPOP less than a year after acquiring it for $200 million. Despite a never-ending parade of social retreads, the company has seen its user base falling to record lows this year. Zynga appears to be pivoting to the emerging real-money gambling business to try to turn things around.

Zynga’s stock has jumped nearly 10 percent since word of Mattrick’s move broke, trading at $3.04 per share at the time of this writing. That’s still far down from the peak of $14.69 per share that the stock hit in March of 2012 after a shaky IPO. Microsoft’s stock is down 0.43 percent to $34.40 at press time.