No kidding
Mattrick’s direct reports will now report directly to Microsoft’s chief executive Steve Ballmer, according to a report in The Wall Street Journal. A replacement hasn’t been named and Mattrick’s departure couldn’t have come at a worse time for Microsoft (Xbox), which continues to grapple for market share and to distinguish itself from the likes of Japan’s Nintendo (Wii U) and Sony Corporation (ADR) (NYSE:SNE) (PlayStation) in the console and game wars. And despite Mattrick’s success, the WSJ article points out that Xbox sales and subscriptions were on the decline through the first nine-months of Microsoft’s fiscal year. Not a good time for this division to be in flux.
In its most recent quarter, Microsoft’s entertainment and devices division, under which Xbox is grouped, generated a 56% increase in revenue to $2.5 billion. The company boasted of an 18% increase in Xbox Live members in its fiscal 3Q quarter versus the year-ago period.
Incidentally, Microsoft had another recent management change. Amy Hood was named chief financial officer in May, replacing Peter Klein, who left after four years in the role.
Content is king
It’s a different story line over at The Walt Disney Company (NYSE:DIS), where the board of directors just gave the stamp of approval to chairman and CEO Bob Iger. The board extended Iger’s contract until 2016, one year longer than expected. Orin C. Smith of The Walt Disney Company (NYSE:DIS)’s board summed up the reasons in a statement:
The Walt Disney Company (NYSE:DIS) has hit new heights during Mr. Iger’s tenure, with total shareholder return of 193% that dramatically exceeds the S&P 500’s 54%, and a market capitalization that has risen to $113.7 billion from $48.4 billion when he became CEO in 2005.
Iger will continue under the existing terms of his annual compensation agreement. More than 90% of his compensation was performance-based in fiscal 2012.
Content is king, and The Walt Disney Company (NYSE:DIS) just acquired the 100% of the distribution rights for a string of Marvel movies, including Iron Man, its sequel, Thor, and Captain America: The First Avenger. The Walt Disney Company (NYSE:DIS) acquired the rights from Paramount. It was under Iger’s tenure that The Walt Disney Company (NYSE:DIS) acquired Marvel Entertainment, in addition to Lucasfilm, an integration that is still unfolding.
Conclusion
Will the management change bring Zynga out of the doldrums? It did on the day that the management switch was announced. But it’s too soon to say if Mattrick is going to be the change that Zynga needs to create value. I’m not quite ready to bet on the stock yet, but the company has become more interesting. Of the three, Disney is exhibiting the greatest amount of stability. I choose Disney.
The article Disney Shows What Management Stability Means, Can Zynga Follow Suit? originally appeared on Fool.com.
Gerelyn Terzo has no position in any stocks mentioned. The Motley Fool recommends Walt Disney. The Motley Fool owns shares of Microsoft and Walt Disney. Gerelyn is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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