Analyst: Zynga CEO should be fired

Zynga CEO Don Mattrick's job security is being questioned as the maker of online game FarmVille — once the most popular game on Facebook — continues to struggle.

A prominent Wall Street analyst on Friday called for Mattrick, who took over the helm at Zynga in July of 2013, to be "terminated" following disappointing fourth-quarter earnings results.

In a scathing research note titled, "Zynga Needs A New Leader — Time for Don Mattrick To Go," BTIG analyst Richard Greenfield outlined his case for why Mattrick, former head of Microsoft's Xbox division, is not the right man for the job.

In his note, Greenfield criticized Mattrick for spending time and money on finding the next big blockbuster at the expense of the company's "core franchises," like Zynga Poker. He also blasted Mattrick for rushing out games and not properly testing games before launching them.

On Thursday, Mattrick admitted to investors that the company hasn't always taken the time it should have to get the games right before launching them, including its NFL Showdown game.

"We moved quickly to release NFL Showdown to hit the season kickoff, but by doing so launched an experience with less features than is typical for a worldwide launch," Mattrick said in the company's earnings call on Thursday.

"We learned the tough lesson that we needed more adequate testing across consumer segments, geographies and devices," he added.

A Zynga spokeswoman declined to comment Friday on Greenfield's research note.

Mattrick took over from Zynga founder Mark Pincus as the publicly traded company struggled to transition to the trend toward mobile gaming and away from gaming on social-networking sites like Facebook, which is where FarmVille rose to gaming fame.

"Your strategy appears to be all over the place," Greenfield said in the note, which was written as a letter to Mattrick. "Your core franchises have and continue to generate meaningful earnings, yet that is being completely offset by your attempts to find the next hit games in categories where Zynga has no underlying expertise," he said.

On Thursday, Zynga said it lost $45.1 million, or 5 cents a share, for the three-month period ended in December. That compares with a loss of $25.2 million, or 3 cents a share, in the year-earlier period.

The bigger loss was due in good part to the company's stock-based compensation. Removing that expense, Zynga reported break-even earnings, in line with Wall Street's expectations.

Zynga lured Mattrick from Microsoft in 2011 with a compensation packaged that topped $50 million, including $25 million in restricted stock.

But Wall Street was mostly disappointed in Zynga's bookings, or the amount of money it records from game sales.

Zynga said fourth-quarter bookings were $182 million, up 24% compared with the fourth quarter of 2013, but up just 4% from the third quarter and below analysts' expectations of $201 million in sales.

The San Francisco company also projected bookings for the first-quarter in the range of $140 million to $150 million, well below Wall Street's expectations for bookings of $203 million.

The stock dropped 15% on Friday to $2.26 a share.

The company went public in 2011 at $10 a share.

Mattrick has tried to help Zynga succeed in a new world of mobile gaming and blockbuster titles with high-profile partnerships, including the National Football League and golfer Tiger Woods.

Currently, however, just one Zynga game, Hit It Rich, is listed in the Top 20 iOS games, noted Piper Jaffray's Michael Olson in a research report.