A major leadership shift is underway at Microsoft Gaming. Phil Spencer, the long-time CEO of Microsoft Gaming, is retiring effective Monday, February 23, 2026, after over three decades with the company. This marks the end of an era for Spencer, who joined Microsoft as an intern in 1988 and played a pivotal role in shaping the Xbox brand since its launch in 2001.
The news comes with further changes at the executive level. Sarah Bond, previously Xbox President and widely considered Spencer’s successor, has resigned from Microsoft to pursue new opportunities. The company has appointed Asha Sharma as the new CEO of Microsoft Gaming, effective immediately. Sharma currently serves as President of Microsoft’s CoreAI product, signaling a potential increased focus on artificial intelligence within the gaming division. This move reflects the growing intersection of AI and gaming, as companies explore how AI can enhance game development, player experiences, and overall platform capabilities.
Matt Booty, currently head of Xbox Game Studios, will be promoted to Chief Content Officer, working closely with Sharma. According to a statement from Microsoft CEO Satya Nadella, “Over 38 years at Microsoft, including 12 years leading Gaming, Phil helped transform what we do and how we do it.”
Nadella shared a message with Microsoft staff expressing gratitude for Spencer’s leadership and outlining the transition plan. Sharma’s appointment brings experience in scaling services to billions of users, previously as Chief Operating Officer at Instacart and a Vice President at Meta. Booty’s promotion recognizes his extensive experience in game development and management of a portfolio encompassing major franchises like Halo, Call of Duty, and The Elder Scrolls.
While some observers have questioned the choice of Sharma, given her background outside of traditional gaming, the company appears confident in her ability to lead Microsoft Gaming into its next phase of growth. The leadership changes come just months before the Xbox brand’s 25th anniversary, setting the stage for a new chapter in the company’s gaming strategy.
