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 position, whereas Sarah Bond, the present President of Xbox, is resigning.

“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 says. “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.”

In a thread on X, Spencer shared his ideas on Sharma’s new place. “I’m excited for [Asha Sharma] as she steps into the CEO role,” Spencer wrote. “She’s joining an incredible group of people; teams full of talent, heart, and a deep commitment to the players they serve. Watching her lean in with curiosity and a real desire to strengthen the foundation we’ve built gives me confidence that our Xbox communities will be well supported in the years ahead.”

Alongside Sharma, Matt Booty, the present head of Xbox Game Studios, is getting promoted to Chief Content 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 “begin a new chapter.” Bond has but to make a public assertion about her resignation.

Spencer joined Microsoft in 1988, and has labored on Xbox since at the least 2001. He assumed duty for Microsoft’s gaming model and its varied studios and related subscription merchandise in 2013, earlier than changing into an Executive VP of Gaming in 2017 and later CEO of Microsoft Gaming in 2022. Spencer’s greatest influence on Xbox will seemingly be remembered because the creation of Game Pass, Microsoft’s “Netflix for Games” and the wave of studio acquisitions Microsoft accomplished from 2018 to 2022, which included smaller studios like Double Fine and the huge $68.7 billion buy of Activision Blizzard King.

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

As far as her plans go, Sharma’s e-mail to workers that was included in Nadella’s announcement is gentle on particulars. Sharma says she plans to proceed creating “great games,” desires to “recommit” to core Xbox followers and “invent new business models and new ways to play.” Whether that’s sufficient to show Xbox’s fortunes round stays to be seen.

Update, February 20, 4:52PM ET: Added assertion from Phil Spencer shared on X.