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Microsoft's Xbox chief leaving to head Zynga

Zynga's new CEO Don Mattrick, right, with Zynga's founding CEO Mark Pincus. Mattrick is the head of Microsoft's Xbox business
Zynga's new CEO Don Mattrick, right, with Zynga's founding CEO Mark Pincus. Mattrick currently heads Microsoft's Xbox business.GlobeNewswire / AP

Executive Don Mattrick, who unveiled the Xbox One in May, is leaving Microsoft to head Zynga, the struggling online social gaming company best known for FarmVille.

Mark Pincus, Zynga’s founding chief executive, announced in an effusive memo to employees Monday that Mattrick, 49, would replace him. Pincus, 47, controls a 61 percent voting stake in the gaming company, so the decision to hire Mattrick would have been his.

"If you’re not familiar with Don, he’s an entertainment and game industry innovator who’s been making products and scaling teams and businesses for the last 30 years," Pincus wrote in a memo posted to AllThingsD. "Don’s had major leadership roles at Microsoft, Electronic Arts and Distinctive Software, which he founded when he was 17 years old."

Zynga's business model, which relied heavily on selling virtual goods to gamers on Facebook, began to disintegrate a year ago as users tired of Facebook games. Pincus has been unable to turn around the company named after his pet bulldog, Zinga.

The company's shares have hovered at just 25 percent of its $10 price at the company's initial offering price in December 2011. Zynga shares closed up around 10.4 percent at $3.07 on the Nasdaq.

Mattrick joined Microsoft in 2007 after spending years at Electronic Arts. He helped turn the Xbox business into a profitable venture after years of losses, eventually propelling it into the No.1 selling console in the United States.

Mattrick's departure comes just as Microsoft gears up to launch the Xbox One, the third version of its console. Scheduled to hit stores later this year, the machine has already stirred up controversy.

Gamers attacked the high price tag, Microsoft's plan to require an Internet connection at least once a day and moves to limit sharing of used games. Last month, Microsoft reversed its position on the Internet connection and said it would allow game sharing.

Mattrick is joining a game maker that publishes social media-based titles and low production-value smartphone games -- a departure from the world of big-budget, traditional packaged games embodied by the Xbox.

Mattrick had been rumored to depart for months. After EA's CEO stepped down in March, industry sources have speculated that he was in the running to lead the top games publisher, where he previously held numerous leadership roles.

Reporting by Reuters'Malathi Nayak, Gerry Shih and Alexei Oreskovic in San Francisco and Bill Rigby in Seattle.

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