Zynga COO Stripped Of His Power After Stocks Collapsed

    August 1, 2012

To say that Zynga is between a rock and a hard place right now would be a bit of an understatement. The company is more like between a wall of cacti and an iron maiden. Either way, they’re going to bleed. That bleeding is starting today as one of the company’s major executives has reportedly lost his power.

Bloomberg is reporting that Zynga COO John Schappert is no longer overseeing game development at Zynga. The report makes it clear that Schappert wasn’t fired, but he pretty much has no influence over the products that Zynga makes anymore. The teams in charge of games at Zynga must now report directly to CEO Mark Pincus.

Considering that Schappert was one of Zynga’s high profile talent acquisitions, his downgrade is a sign that all is not well. Pincus’ involvement in game design makes its clear that Zynga wants to make sure that their next game is an absolute hit. If not, it could spell more doom and gloom for the games company that took the world by storm, then tumbled to a share price of $2.82.

According to Bloomberg, the removal of Schappert and other organizational changes signals an increased move to mobile for the company. Zynga has not had a big hit in the mobile space yet, so their reorganization may help them make a splash. The only problem is that mobile is far more competitive than Facebook and Zynga might not be able to survive off of brand name alone anymore. They will need to craft new and exciting experiences instead of just copying the design of other popular mobile titles.

On top of the reorganization, Zynga is also facing investigations over insider trading. It seemed a little suspicious that Pincus and other Zynga insiders dumped their stock before the price plunged. The results of those investigations should prove interesting. We’ll keep you up to date on any new developments as Zynga is sure to be the center of a lot of news in the coming weeks.