Xbox head Phil Spencer is leaving Microsoft

Source: Engadget

Leadership Changes

Phil Spencer, CEO of Microsoft Gaming, is retiring, announced Satya Nadella. Asha Sharma, President of Microsoft’s CoreAI division, will become Executive Vice President and CEO of Microsoft Gaming, reporting directly to Nadella.

“I am long on gaming and its role at the center of our consumer ambition, and as we look ahead, I’m excited to share that Asha Sharma will become Executive Vice President and CEO, Microsoft Gaming, reporting to me,” Nadella said.
“Over the last two years at Microsoft, and previously as Chief Operating Officer at Instacart and a Vice President at Meta, Asha has helped build and scale services that reach billions of people and support thriving consumer and developer ecosystems. She brings deep experience building and growing platforms, aligning business models to long‑term value, and operating at global scale, which will be critical in leading our gaming business into its next era of growth.”

Alongside Sharma, Matt Booty, current head of Xbox Game Studios, is being promoted to Chief Content Officer and will report to Sharma. Sarah Bond, the current President of Xbox and a public face for the brand, is resigning to “begin a new chapter.”

Phil Spencer’s Legacy

• Joined Microsoft in 1988; involved with Xbox since at least 2001.
• Took responsibility for Microsoft’s gaming brand and studios in 2013.
• Became Executive Vice President of Gaming in 2017 and CEO of Microsoft Gaming in 2022.
• Most notable achievements: creation of Game Pass (“Netflix for Games”) and a series of studio acquisitions from 2018‑2022, including smaller studios like Double Fine and the $68.7 billion purchase of Activision Blizzard King.

Challenges Facing Xbox

• Despite a strong portfolio of developers and IP, Xbox has struggled to compete with Sony and Nintendo in the current console generation.
• The gaming division experienced widespread layoffs, and revenue declined throughout 2025.
• Prices for both consoles and Game Pass Ultimate were raised, which may further impact growth.
• Sharma is inheriting a division described as a “broken‑down car.”

Sharma’s Outlook

In an email to staff included with Nadella’s announcement, Sharma outlined a high‑level vision:

• Continue developing “great games.”
• Recommit to core Xbox fans.
• Invent new business models and new ways to play.

Whether these plans will reverse Xbox’s fortunes remains to be seen.