Mattrick’s choice of Zynga and what it says about console gaming

Last week the head of Microsoft’s Xbox unit, Don Mattrick, surprised many by leaving the company.

Normally when a key executive leaves a company on the eve of the launch of a flagship product, many would view it as a bad sign. And while I personally think Don Mattrick’s departure from Microsoft on the eve of the launch of the Xbox One is not necessarily a good sign, I’d hesitate to call it a damning statement about the new console and, more broadly, the state of console gaming.

Instead, I’d suggest this move has more to do with Mattrick’s own personal ambition and affection for Zynga, a company he once tried to acquire while at Microsoft. And oh yeah: a $50 million compensation package probably had a little to do with it as well.

As for what this may or may not say about console gaming, I’d agree that console gaming is going to be increasingly under fire as mobile and cloud become a more important part of the gaming mix, but I think there will be a substantial market for the high-end premium gaming and entertainment experience that one can only get through a console today and in the near future.

The disappointing Ouya Android-centric console is one sign of how difficult it is to replace a traditional console, but another would be Mattrick’s own words.

During a chance encounter at the Xbox One reveal day a month and a half ago, Mattrick talked about cloud gaming (including OnLive and Gaikai) with a few analysts, myself included. He talked about how despite the fact that the company would be employing 300,000 servers for Xbox Live with the new Xbox One, true high-end gaming experiences still require significant amounts of compute resources locally.

So yes, long term Mattrick could be on the right side of a shift toward cloud-centric gaming, but I think even he would tell you that the console — at least for this generation — is safe.

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Michael Wolf

Chief Analyst NextMarket Insights

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