Phil Spencer, who has led Microsoft Gaming for over a decade, announced his retirement after 38 years with the company. Asha Sharma, currently heading Microsoft's CoreAI division, will succeed him as CEO of Microsoft Gaming. The changes also include the resignation of Xbox President Sarah Bond and a promotion for Matt Booty.
Phil Spencer joined Microsoft as an intern in 1988 and rose through the ranks, becoming head of Xbox in 2014. He guided the division through challenges like the Xbox One launch and oversaw major acquisitions, including the 2020 purchase of Bethesda Softworks and the $68.7 billion merger with Activision Blizzard in 2023. Spencer created Game Pass, Microsoft's subscription service for games, and managed studio buys from 2018 to 2022, such as Double Fine.
In a departure note, Spencer said he informed CEO Satya Nadella last fall that he was considering stepping back. He will stay in an advisory role through the summer to aid the transition. On X, Spencer expressed excitement for Sharma, noting she joins "an incredible group of people; teams full of talent, heart, and a deep commitment to the players they serve."
Asha Sharma, who joined Microsoft two years ago after roles at Meta and as COO at Instacart, outlined her vision in a message to staff. She promised a "return of Xbox" and recommitment to core fans across console, PC, mobile, and cloud. Sharma emphasized inventing new business models without treating games as "static IP to milk and monetize," and rejected using AI for "soulless slop," stating, "Games are and always will be art, crafted by humans."
Nadella praised Sharma's experience in scaling platforms and said he remains "long on gaming and its role at the center of our consumer ambition." Meanwhile, Sarah Bond is resigning to begin a new chapter, with no public statement yet. Matt Booty, head of Xbox Game Studios, advances to Executive Vice President and Chief Content Officer, reporting to Sharma.
These shifts occur amid Xbox's pivot from console focus, with falling hardware sales, 2025 layoffs, and price hikes for consoles and Game Pass. Microsoft has branded Windows-based portables like the Xbox ROG Ally and plans a new dedicated console, though details are unclear.
