After nearly four decades with Microsoft, Phil Spencer is stepping down as CEO of Microsoft Gaming, marking a significant shift in leadership for the tech giant. The announcement, made on February 20, 2026, signals a modern era for Xbox and the company’s broader gaming ambitions.
Spencer, who began his career at Microsoft as an intern in 1988 and played a pivotal role in the growth of Xbox from its inception, will remain with the company as an advisor through later this year to ensure a smooth transition. His departure follows those of other key Microsoft figures, including Chris Young and Thomas Dohmke in 2025, and Charlie Bell earlier this month.
Taking the helm as the new CEO of Microsoft Gaming is Asha Sharma, previously president of product development for Microsoft’s CoreAI division. Sharma brings experience from Instacart and Meta, and will now oversee Xbox, Game Pass, and Xbox Game Studios. This appointment represents a move towards bringing in leadership with a strong background in artificial intelligence, a technology increasingly impacting the gaming industry.
Sharma expressed a sense of humility and urgency as she begins her role, stating, “We are building on a legacy created by generations of developers, creators, and engineers.”
She outlined three key commitments as her priorities: focusing on games with memorable characters, compelling stories, and innovative gameplay; strengthening the Xbox brand and its relationship with fans and developers, with a renewed emphasis on the importance of consoles while ensuring seamless experiences across PC, mobile, and cloud; and fostering the future of gaming through new business models and creative tools, responsibly leveraging artificial intelligence to augment, not replace, human creativity.
In addition to Sharma’s promotion, Matt Booty has been elevated to Chief Content Officer, a role designed to bolster the future of the Xbox content ecosystem. The leadership changes approach as Microsoft navigates a challenging landscape in the gaming market, with Xbox console sales lagging behind competitors like Sony’s PlayStation and Nintendo’s Switch.
Microsoft’s gaming revenue declined nearly 10% in the December quarter, a steeper drop than anticipated, following a $75 billion acquisition of Activision Blizzard in 2023. The company also announced an unspecified impairment charge in its gaming business in January.
The shake-up at Microsoft Gaming underscores the competitive pressures facing the industry and the company’s commitment to adapting to evolving consumer preferences and technological advancements.
What are your thoughts on these leadership changes?
