Xbox head Phil Spencer is leaving Microsoft

Key takeaways

• Phil Spencer, CEO of Microsoft Gaming, is retiring from his role.
• Asha Sharma, previously President of Microsoft's CoreAI division, will succeed Spencer as Executive Vice President and CEO, Microsoft Gaming.
• Sarah Bond, the current President of Xbox, is resigning from Microsoft.
• Matt Booty, head of Xbox Game Studios, has been promoted to Chief Content Officer and will report to Sharma.
• The leadership changes occur as the Xbox division faces significant challenges, including declining revenue and market competition.

What happened

Satya Nadella, CEO of Microsoft, has announced that Phil Spencer, CEO of Microsoft Gaming, is retiring. Spencer will be succeeded by Asha Sharma, who will assume the role of Executive Vice President and CEO, Microsoft Gaming, reporting directly to Nadella. Sharma previously served as President of Microsoft's CoreAI division.

Alongside this major leadership transition, Sarah Bond, who held the position of President of Xbox, is resigning from Microsoft to "begin a new chapter." Matt Booty, the head of Xbox Game Studios, is being promoted to Chief Content Officer and will report to the incoming CEO, Asha Sharma.

Nadella expressed his enthusiasm for Sharma's appointment, stating, "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." He highlighted her "deep experience building and growing platforms, aligning business models to long-term value, and operating at global scale," which he believes will be critical for leading the gaming business into its next era of growth.

Phil Spencer shared his thoughts on Sharma's new position on X, stating, "I’m excited for [Asha Sharma] as she steps into the CEO role. 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."

Why it matters

This leadership overhaul marks a significant moment for Microsoft's gaming division. Phil Spencer has been a prominent figure in the Xbox brand for decades, leading it through transformative periods. His departure signals the end of an era defined by strategic shifts like the introduction of Game Pass and aggressive studio acquisitions.

Spencer's successor, Asha Sharma, brings extensive experience in scaling services and managing consumer and developer ecosystems, albeit largely from outside the traditional gaming industry. Her appointment, along with Sarah Bond's resignation and Matt Booty's promotion, indicates a substantial change in the leadership structure at a time when Xbox faces considerable challenges in the competitive console market. The new leadership will need to navigate a landscape where Xbox has reportedly struggled against rivals like Sony and Nintendo.

Key details / context

Phil Spencer's career at Microsoft began in 1988, with his involvement in Xbox dating back to at least 2001. He took responsibility for Microsoft's gaming brand, its studios, and subscription products in 2013, eventually becoming an Executive VP of Gaming in 2017, and CEO of Microsoft Gaming in 2022.

Spencer's most notable impacts on Xbox include the creation of Game Pass, described as Microsoft's "Netflix for Games," and a significant wave of studio acquisitions between 2018 and 2022. These acquisitions ranged from smaller developers like Double Fine to the monumental $68.7 billion purchase of Activision Blizzard King.

Despite these strategic moves, Microsoft's gaming division has faced difficulties. The company experienced widespread layoffs, its revenue continued to fall throughout 2025, and it raised the prices of both its consoles and Game Pass Ultimate. The source notes that Sharma is "in many ways inheriting a broken-down car," reflecting the division's current struggles to compete effectively in the market.

Asha Sharma's background includes serving as Chief Operating Officer at Instacart and a Vice President at Meta before joining Microsoft. Sarah Bond, who served as a public face for the Xbox brand alongside Spencer, has not yet made a public statement regarding her resignation.

What happens next

Asha Sharma steps into her new role as Executive Vice President and CEO, Microsoft Gaming, immediately assuming leadership of the entire gaming division. Her initial plans, as outlined in an email to staff included in Nadella's announcement, are broad. Sharma stated her intention to continue developing "great games," to "recommit" to core Xbox fans, and to "invent new business models and new ways to play."

Matt Booty, as the new Chief Content Officer, will report to Sharma and presumably oversee the creative direction and output of Xbox Game Studios. The precise strategies and initiatives Sharma will implement to address Xbox's current challenges, such as falling revenue and intense competition, remain to be seen. Her ability to translate her experience in scaling consumer platforms into turning around Xbox's fortunes will be a key focus in the coming months.

FAQ

Q: Who is replacing Phil Spencer as the head of Microsoft Gaming? A: Asha Sharma, formerly President of Microsoft's CoreAI division, is taking over as Executive Vice President and CEO, Microsoft Gaming.

Q: What are some of Phil Spencer's key legacies at Xbox? A: Spencer is widely recognized for the creation of Game Pass and the acquisition of numerous game studios, including the $68.7 billion purchase of Activision Blizzard King.

Q: What challenges does the new Xbox leadership face? A: The Xbox division is currently struggling with widespread layoffs, falling revenue, increased prices for consoles and Game Pass Ultimate, and intense competition from Sony and Nintendo.