Microsoft Gaming Chief Phil Spencer Retires After 38 Years, AI Executive Asha Sharma Takes Over
Microsoft announced that longtime Xbox leader Phil Spencer is retiring after 38 years at the company, marking a major leadership shift as the tech giant’s gaming division navigates slowing console sales and broader industry changes.
Microsoft CEO Satya Nadella said in a memo to employees that Spencer decided last year to step down and that succession planning has been underway. Nadella credited Spencer with transforming Microsoft’s gaming business during his 12 years at the helm, including overseeing major acquisitions such as Activision Blizzard and Mojang, the developer of Minecraft.
Spencer took charge of Xbox in 2014 at a time when Sony’s PlayStation was outselling Microsoft’s consoles and some investors were questioning the future of the gaming unit. Under his leadership, Microsoft consolidated hardware, software, and game development teams and made a 75 billion dollar acquisition of Activision Blizzard in 2023 to expand its portfolio.
Despite those efforts, Microsoft’s gaming revenue declined about 10 percent in the December quarter compared with a year earlier, even as overall company revenue rose nearly 17 percent. The company also recorded an impairment charge related to its gaming business earlier this year. Current generation Xbox consoles have struggled to match the popularity of Sony’s PlayStation and Nintendo’s Switch.
Asha Sharma will replace Spencer as CEO of gaming and will report directly to Nadella. Sharma joined Microsoft in 2024 from Instacart and most recently served as president of product in the company’s Core AI division. She previously held leadership roles at Meta and earlier in her career at Microsoft.
In a message to gaming employees, Sharma pledged to recommit to core Xbox fans and developers while navigating the future of artificial intelligence in gaming. She said Microsoft would not pursue short term gains by flooding the platform with low quality AI content and emphasized that games remain an art form created by humans.
Sharma said Microsoft will renew its commitment to console gaming, which began with the launch of the original Xbox in 2001. Matt Booty, who leads Microsoft’s gaming studios, will report to her as executive vice president and chief content officer.
Sarah Bond, president and operating chief of the Xbox unit, will depart the company but said she has already begun working with Sharma to ensure a smooth transition. Both Bond and Spencer said they will advise Sharma during the leadership change as Microsoft charts the next chapter for Xbox.