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Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Janet I. Tu.

July 2, 2013 at 5:45 AM

On Don Mattrick’s departure and the rumored reorg

[This story is running in today's print edition of The Seattle Times.]

Don Mattrick, who has been president of Microsoft's Interactive Entertainment Business, is leaving to become Zynga's CEO.  (Photo from Microsoft)

Don Mattrick, who has been president of Microsoft’s Interactive Entertainment Business for three years, is leaving to become Zynga’s CEO. (Photo from Microsoft)

Don Mattrick, head of the Microsoft division that produces Xbox, is leaving to lead social-game company Zynga — a move that could signal the first big-name jumping of ship from Microsoft in an expected companywide reorganization.

Mattrick, 49, who has been president of Microsoft’s Interactive Entertainment Business for three years, will become Zynga CEO and a member of its board starting Monday.

Mark Pincus, Zynga’s founding CEO, will remain chairman of the board and Zynga’s chief product officer.

There’s been speculation that Mattrick’s move could have been motivated by a reorganization that Microsoft CEO Steve Ballmer has reportedly been working on and that could be announced as soon as Tuesday.

The reorganization is believed to be part of Ballmer’s move toward transitioning the software company into a devices-and-services one.

Rumors of the changes include consolidation of Windows and Windows Phone into one division focusing on operating systems; an expanded role for Server & Tools Business President Satya Nadella — perhaps as head of a new enterprise division; the formation of a services and apps division, possibly headed by current Online Services Division President Qi Lu; and the placement of all hardware units, including Xbox and Surface, under one leader.

Mattrick’s name had been rumored as a possible head of that hardware division.

But now, some speculate, he may have lost out in a power struggle in the reorganization, and that the reveal of some of the initial requirements of the upcoming Xbox One gaming console, which angered many gamers, didn’t help.

Those Xbox One requirements — since reversed — included needing a regular Internet connection and limits on how used games could be given, shared or resold.

The announcements of the new console “failed to explain the vision and possibilities of the new design, leading to confusion and resentment from critical segments of the target audience,” said analyst Rob Sanfilippo, with independent research firm Directions on Microsoft.

Microsoft failed to predict Sony’s strategy for its upcoming PlayStation 4, which, among other things, undercut the Xbox One by $100, and “which has allowed Sony to win over mindshare that Microsoft had previously captured,” Sanfilippo said.

Those missteps could put Microsoft’s current strong position in the console market in jeopardy and “thus, accountability needs to be addressed and I believe we’re seeing at least the first of that with Mattrick’s departure,” he said.

In any case, the timing of Mattrick’s announcement struck some observers as odd.

“I’m in shock,” said Lewis Ward, an analyst with the research firm IDC. “To leave five months before the unveiling of Xbox One, the next-generation platform, seems questionable and odd timing to me. I can imagine it happening six months or a year after the launch.

“But to leave beforehand has to make some people revisit or question the Xbox One strategy at a basic level,” Ward said.

 [Continue reading the story here.]

Comments | More in Microsoft | Topics: don mattrick, reorganization, xbox

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