Xbox head Phil Spencer is leaving Microsoft
Microsoft Gaming CEO Phil Spencer is retiring, Satya Nadella announced. Asha Sharma, president of Microsoft’s CoreAI division, takes over Spencer’s role, while Sarah Bond, the current president of Xbox, steps down.
“I am committed to gaming and its role at the center of our consumer ambition, and as we look to the future, I am excited to announce that Asha Sharma will become executive vice president and CEO of Microsoft Gaming, reporting to me,” said Nadella. “Over the past two years at Microsoft, and previously as COO at Instacart and VP at Meta, Asha helped build and scale services that reach billions of people and support thriving consumer and developer ecosystems.
In a thread on X, Spencer shared his thoughts on Sharma’s new position. “I’m excited for [Asha Sharma] as she takes on the role of CEO,” Spencer wrote. “She joins an incredible group of people; teams full of talent, heart and a deep commitment to the players they serve. Seeing her step 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 for years to come.
Alongside Sharma, Matt Booty, the current head of Xbox Game Studios, is promoted to chief content officer and will report to Sharma. Sarah Bond, who like Spencer was the public face of the Xbox brand and was intended to be its successor, is leaving Microsoft to “start a new chapter.” Bond has yet to make a public statement regarding his resignation.
Spencer joined Microsoft in 1988 and has worked on Xbox since at least 2001. He assumed responsibility for Microsoft’s gaming brand and its various studios and associated subscription products in 2013, before becoming executive vice president of gaming in 2017, then CEO of Microsoft Gaming in 2022. Spencer’s biggest impact on Xbox will likely be remembered with the creation of Game Pass, Microsoft’s “Netflix for gaming” and the wave of studio acquisitions that Microsoft made from 2018 to 2022, which included smaller studios like Double Fine and Activision’s massive purchase of Blizzard King for $68.7 billion.
Although Microsoft has plenty of developers and IP to rely on, it has struggled to compete with Sony and Nintendo during the current console generation. Microsoft’s gaming division saw massive layoffs, its revenue continued to decline throughout 2025, and it raised the prices of its consoles and Game Pass Ultimate, which likely won’t help matters going forward. Sharma in many ways inherits a broken car.
As for his plans, Sharma’s email to staff included in Nadella’s announcement is scant in detail. Sharma says she plans to continue developing “great games,” wants to “reaffirm our commitment” to Xbox’s core fans, and “invent new business models and new ways to play.” It remains to be seen whether this will be enough to turn around Xbox’s situation.
Update, February 20 at 4:52 p.m. ET: Added a statement from Phil Spencer shared on X.
