This story just got way more interesting. Perhaps it was actually Mattrick who saw the writing on the wall for XBone after all.
With launch looming, Xbox team seeks new leader
Mike Snider and Brett Molina, USA TODAY7:50 p.m. EDT July 1, 2013
Less than six months before its new Xbox One video game system comes to market, Microsoft is searching for a new exec to head its Xbox unit.
(Photo: Matt Sayles, AP/Invision for Xbox)
Microsoft's Xbox video game division is in search of a new controller.
Social game company Zynga announced Monday that Don Mattrick, who served as president of Microsoft's Interactive entertainment business for nearly three years, would be Zynga's new CEO. He had been with Microsoft since 2007, when he left Electronic Arts.
The timing could hardly be worse for Microsoft. The company unveiled its new Xbox One game system, due out this holiday season, just six weeks ago.
Then, two weeks ago, the company backpedaled on the console's need for an always-on Internet connection and limits on used and shared game discs.
Now, the man who oversaw the entire Xbox business says its "game over" for him at Microsoft.
"This news is another hit to the Xbox team," says Digital World Research analyst P.J. McNealy. "This one hurts."
What makes this so surprising is that Mattrick was master of ceremonies at theunveiling of the Xbox One at Microsoft's campus just six weeks ago. "It's arguably the most important launch in the company in the past ten years (or) for the next ten years," he says. "It's a cornerstone piece for Microsoft to be in front of consumers in the living room on the TV or while mobile."
The Xbox One is being positioned as more than simply a video game machine. Microsoft is making deals with pay TV providers so that the system works as the equivalent of a cable TV box. Mattrick "has quietly and firmly been driving the vision of the connected consumer, Microsoft-style," McNealy says. "It has been a challenge to carve out a road map where the competition from both Google and Apple is pretty fierce. ... Losing him is a huge blow, and the timing is horrendous."
And it was Mattrick who made the announcement on the official Xbox web site that the Xbox One would not -- as announced at the unveiling -- require an always-on Internet connection, and that used games could be played on the system. Mattrick's departure "continues a really forgettable negative PR streak for Microsoft while trying to launch its biggest consumer initiative of all time, Xbox One," McNealy says.
Microsoft's Entertainment and Devices division, for which Mattrick served as president of the interactive entertainment business unit, has been the company's fastest-growing revenue unit. It posted a whopping 33% uptick in revenue in the third quarter of 2013, compared to flat growth from Microsoft's Windows unit and 5% gains from its business unit responsible for server software, on an adjusted basis.
For now, the Xbox executives who answered to Mattrick will report to Microsoft CEO Steve Ballmer. "This is a great opportunity for Don, and I wish him success," Ballmer said in an email to employees. "Don's directs will report to me and will continue to drive the day-to-day business as a team, particularly focused on shipping Xbox One this holiday."
He noted that under Mattrick, Microsoft's online network Xbox Live grew from 6 million to 48 million members and the Xbox 360 became the top-selling console in North America over the past two years.
"Don's been an industry pioneer and a key catalyst to Microsoft's success in video games," says Electronic Entertainment Design and Research analyst Jesse Divnich. "He's leaving behind a well-crafted and very skilled team of executives that are perfectly capable of carrying the torch."
Inside Network analyst Billy Pidgeon credits Mattrick with helping the Xbox brand evolve beyond video games. "We've seen most of Xbox become a hub for much of the entertainment software and delivery systems within Microsoft, which is smart," he says. "That may have a bigger impact than the console business in the long term."
At Baird Equity Research, analyst Colin Sebastian said that Mattrick's departure was unrelated to the recent Xbox One issues. While the departure "creates some uncertainly for Microsoft ahead of the Xbox One launch," he says, "we believe most of the major strategic decisions have been made, and the existing Xbox team will manage the day-to-day business and launch."
As for Mattrick's successor to lead the Xbox division, expect Microsoft to look inside. "Don had a pretty strong team of direct reports," says McNealy, which includes Corporate VP of Microsoft Game Studios Phil Spencer and Yusuf Mehdi, the division's chief marketing officer.
A different type of exec might be needed anyway, with a rumored Microsoft reorganization that could yield a new devices business division that would fold in the Xbox business, says Van Baker, research vice president for mobility at Gartner. "This is not necessarily a big loss for Microsoft as their business is a mature gaming business," he says. "It will depend on whether they can find a strong replacement. Working at Microsoft has its challenges, as well as Xbox is viewed as an ancillary business to their Windows and Office business."
Contributing: Scott Martin
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USA Today: Mattrick left of his own free will according to analysts
Last edited by Lefein; 07-02-2013 at 01:14.
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Who voluntarily goes from Halo to Farmville?
Anyone who wants to put CEO in front of their name instead of President?
If he walked, and wasn't pushed, that should tell anyone what sort of guy he is. Who would walk out on one the most important times of a companies product launch?
Would you hire a guy who did that?
I remember months ago when we were discussing who would replace Mattrick. I'm glad he's gone but I do think the deal was already in place.
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