COO Schappert leaves Zynga
John Schappert departs social gaming giant after responsibility for product development taken over by Mark Pincus " company claims no disagreement over any matters.
Zynga’s chief operating officer John Schappert has resigned from his role and stepped down from the social gaming operator’s board, just over a week after responsibility for product development was taken from him by CEO Mark Pincus.
In a statement released last night, Zynga announced: “Mr. Schappert’s resignation from the Board was not tendered in connection with any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.
“The Company noted that Mr. Schappert has made significant contributions to the games industry throughout his career and it appreciates all that he has done for the Company. The Company further noted that Mr. Schappert leaves as a friend of the Company and it wishes him all the best,” the statement read.
Schappert’s resignation, effective immediately, takes place after it was announced that executive vice president of games Steve Chiang and head of mobile operations David Ko would report directly to Pincus, thought to be part of an attempt to reverse a startling decline in the company’s fortunes. Zynga’s share price has fallen from a high of US$14.69 in March this year to as low as $2.7, before recovering to its current rate of $2.95 “ a decline of around 80%.
This drop has been prompted in part by poor financial results, which have fallen well below market expectations, due largely to delays in launching new products such as The Ville and the rapid decline of products such as OMGPOP’s Draw Something, acquired for what is now seen as an over-inflated price of $180m in January this year.
Having held responsibility for product, Schappert is seen in part to be responsible for this decline, which has led to significant losses, most recently $108.2m for the second quarter of 2012. This is understood to have pushed forward the company’s plans to enter the real-money gambling sector.
However, at the time Michael Pachter, managing director of Wedbush Securities, told Business Insider that Pincus had made an “idiotic” decision by removing someone as experienced as Schappert: “Pulling a game guy out of the primary responsibility for managing the game effort, and putting a non-game guy, which is Pincus, in charge, I think that’s idiotic,”
“The newer games are doing really quite well and it’s really that the growth of the new stuff isn’t offsetting the decline in the old stuff. So I’m not sure how that’s Schappert’s responsibility or fault, and I think this is probably ultimately going to be a strategic error that bites them in the butt,” Pachter explained.
Zynga poached Schappert from rival operator Electronic Arts in April 2011, where he served as president and COO. He had originally joined EA in 1998, before spending two years heading up Microsoft’s Xbox Live gaming department from 2007 to 2009.
Schappert’s departure is the latest high-profile incident to affect the operator this week, after it was announced that his former employers EA had filed a copyright infringement suit against Zynga, highlighting similarities between The Ville and The Sims Social.
This came in addition to a class action lawsuit alleging securities fraud by Zynga’s executives and investors, after a number of them sold off shares ahead of the stock price crash.