Bloomberg News

Zynga COO Said to Lose Product Oversight as Growth Slows

July 31, 2012

Zynga earnings

Mark Pincus, chairman and chief executive officer of Zynga Inc., an event at Zynga Inc. headquarters in San Francisco. Photographer: David Paul Morris/Bloomberg

Zynga Inc. (ZNGA:US) Chief Operating Officer John Schappert, who was wooed from Electronic Arts Inc. (EA:US) last year, was stripped of his role overseeing game development in a reorganization aimed at reviving growth and making more money from mobile services, people familiar with the matter said.

David Ko, who runs Zynga’s mobile operations, and Steve Chiang, executive vice president of games, both of whom reported to Schappert, now report directly to Chief Executive Officer Mark Pincus, said the people, who asked not to be identified because the plan hasn’t been disclosed.

Pincus embarked on the overhaul in early July, at the close of a quarter marked by slowing sales growth and a drop in demand for virtual goods. Schappert, lured with a pay package worth $42.8 million, has lost support within the company and taken some of the blame for underperformance, the people said. The reorganization was aimed in part at making mobile-software development more of a priority across Zynga, the people said.

Stephanie Hess, a spokeswoman for San Francisco-based Zynga, declined to comment.

Ko will work with Chiang to involve more of the company’s best designers on apps for smartphones and tablets, the people said.

Schappert joined Zynga in April 2011 after spending much of his career at its chief rival. He began at Electronic Arts in 1998 when the game giant acquired his development company, Tiburon Studios. He left in 2007 to head Microsoft Corp.’s Xbox Live unit before returning to EA in 2009 as president and chief operating officer.

Shares of Zynga fell 2 percent to $2.95 at the close in New York. The stock has dropped 71 percent since the company held its initial public offering in December. The decline accelerated last week after Zynga reported sales and profit that missed analysts’ predictions.

To contact the reporter on this story: Douglas MacMillan in San Francisco at

To contact the editor responsible for this story: Tom Giles at

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