CEO Switcharoo At Mobile Game Maker Pocket Gems: Co-Founder Terry Becomes Chief Creative Officer

Zynga’s not the only one mixing around management these days. Pocket Gems, a mid-size mobile game developer backed by Sequoia Capital, is seeing some changes at the top today.

Co-founder Daniel Terry is stepping down from the CEO role and becoming the company’s chief creative officer and executive chairman. Chief operating officer Ben Liu, who had already been running day-to-day operations at the company, moves into the CEO role. Terry said the company just posted its best quarter in terms of revenues and gross profit and added about 35 employees in the same time period for a total headcount of 140.

“Things are growing well,” Terry said. “It’s time to take riskier bets in mobile entertainment.”

The thing, though, is that the entire casual free-to-play gaming ecosystem is feeling the fallout of Zynga’s disastrous post-IPO performance. With marketing costs up from a year or two ago plus the lack of any overwhelmingly dominant leader on the charts, it would be hard to justify the same kind of valuation that any of these gaming companies might have commanded 12 to 18 months ago. That’s not to say these companies can’t be run as decent and consistently profitable businesses. It’s just that Zynga has taken some of the shine off the space.

Pocket Gems was an early mover in mobile, casual gaming, with simulation farming and zoo games on iOS. They had two of the highest grossing games on iOS for all of last year, with Tap Zoo taking the No. 1 spot and Tap Pet Hotel reaching fourth place.

But the environment quickly became crowded with Zynga’s own entrants like Dream Zoo. The company has managed in spite of that with newer hits like Tap Paradise Cove and Tap Campus Life that still retain placement among the highest 50 grossing iOS apps in the U.S. Thankfully, iOS’s entire footprint has grown enough to create a tide that lifts all boats in terms of revenue, even if it’s much harder to keep a top 5 grossing spot.

As part of his new role, Terry will open an office in New York to explore creative partnerships with other companies. He didn’t offer too many specifics about what he’ll end up working on, though.

“I can’t really talk much about it. Numerous competitors are excited about following us,” he said.

Liu has already been in a de facto CEO-like role at Pocket Gems for some time. He’s an experienced gaming executive with stints at Playdom, where he managed the teams behind City of Wonder and Gradens of Time. Before that, he was a producer for BioWare/Pandemic, which was acquired by EA.

Terry said this was his decision and that Sequoia is fully supportive. Pocket Gems has also raised funding from Redpoint Ventures in a round that was never formally announced and was said to be centered around providing founder liquidity. The company raised $5 million from Sequoia back in 2010.