In a significant shakeup for the gaming industry, Phil Spencer is stepping down as CEO of Microsoft Gaming after twelve years leading the Xbox brand.
The changes, announced internally and taking effect Monday, February 23, also see Xbox President Sarah Bond departing the company. Bond had previously taken over leadership of Xbox following Spencer’s transition to a broader role within Microsoft overseeing gaming.
Asha Sharma, currently president of Microsoft’s CoreAI division, will assume the role of CEO of Microsoft Gaming. This appointment signals Microsoft’s increasing focus on artificial intelligence across its gaming operations, a trend gaining momentum throughout the tech sector.
Matt Booty, head of Xbox Game Studios, will be promoted to Chief Content Officer and will work closely with Sharma. Spencer will remain in a consulting capacity through the summer to ensure a smooth transition.
Sharma joined Microsoft in 2024, bringing experience from leadership positions at Meta and Instacart. In her initial message to employees, she outlined a three-pronged strategy: delivering great games, reinvesting in Xbox as a platform, and shaping the future of gaming.
She pledged to support both established franchises and innovative new ideas, emphasizing a willingness to take risks. Sharma also indicated a renewed focus on the console experience, recognizing the importance of the core Xbox community that has supported the brand for 25 years.
“We will not chase short-term efficiencies or flood the ecosystem with soulless AI-generated content,” Sharma wrote, underscoring her belief that games remain an art form created by people.
The leadership changes arrive after a challenging period for Xbox consoles, which have faced increased competition and price adjustments to both hardware and Game Pass subscriptions. The move reflects the broader pressures facing the gaming industry as it navigates evolving consumer expectations and economic conditions.
The implications of this restructuring for Microsoft’s recently announced platform-agnostic gaming approach remain unclear.
