Xbox head Phil Spencer is leaving Microsoft

Phil Spencer, CEO of Microsoft Gaming, is retiring, Satya Nadella has announced. Asha Sharma, the President of Microsoft’s CoreAI division is taking up Spencer’s function, whereas Sarah Bond, the present President of Xbox, is resigning.

“I’m lengthy on gaming and its function on the heart of our shopper ambition, and as we glance forward, I’m excited to share that Asha Sharma will turn out to be Govt Vice President and CEO, Microsoft Gaming, reporting to me,” Nadella says. “During the last two years at Microsoft, and beforehand as Chief Working Officer at Instacart and a Vice President at Meta, Asha has helped construct and scale companies that attain billions of individuals and help thriving shopper and developer ecosystems. She brings deep expertise constructing and rising platforms, aligning enterprise fashions to long-term worth, and working at world scale, which can be vital in main our gaming enterprise into its subsequent period of development.”

Alongside Sharma, Matt Booty, the present head of Xbox Sport Studios, is getting promoted to Chief Content material Officer, and can report back to Sharma. Sarah Bond, who like Spencer served as a public face for the Xbox model and was assumed to be his successor, is leaving Microsoft to “start a brand new chapter.”

Spencer joined Microsoft in 1988, and has labored on Xbox since at the least 2001. He assumed accountability for Microsoft’s gaming model and its numerous studios and related subscription merchandise in 2013, earlier than turning into an Govt VP of Gaming in 2017 and later CEO of Microsoft Gaming in 2022. Spencer’s largest impression on Xbox will doubtless be remembered because the creation of Game Pass, Microsoft’s “Netflix for Video games” and the wave of studio acquisitions Microsoft accomplished from 2018 to 2022, which included smaller studios like Double Fine and the large $68.7 billion purchase of Activision Blizzard King.

Whereas Microsoft has loads of builders and IP to fall again on, it is struggled to compete with the likes of Sony and Nintendo in the course of the present console era. Microsoft’s gaming division has gone by widespread layoffs, its income continued to fall all through 2025 and it raised the costs of both its consoles and Game Pass Ultimate, which doubtless will not assist issues going ahead. Sharma is in some ways inheriting a broken-down car.

So far as her plans go, Sharma’s e mail to employees that was included in Nadella’s announcement is mild on particulars. Sharma says she plans to proceed growing “nice video games,” needs to “recommit” to core Xbox followers and “invent new enterprise fashions and new methods to play.” Whether or not that is sufficient to flip Xbox’s fortunes round stays to be seen.