Phil Spencer, the longtime face of Xbox and one of the most recognizable figures in the gaming industry is retiring from Microsoft. Spencer’s departure comes alongside the resignation of Xbox President Sarah Bond and the appointment of Asha Sharma — currently head of Microsoft’s AI Platform — as the new CEO of Microsoft Gaming. The shake-up marks one of the biggest leadership transitions in Xbox’s 25-year history.
Phil Spencer Retires: The end of a 25-year era at Xbox
Spencer first joined Microsoft as an intern in June 1988. Over nearly four decades, he rose through product and studio leadership roles before being named Head of Xbox in March 2014. That was a pivotal moment, as the Xbox brand was reeling from a rocky Xbox One launch that had alienated core gamers. Phil Spencer led the Xbox One’s big comeback, as the console went from Kinect-centric to becoming the gamers’ darling by the end of the generation. He was elevated to Executive Vice President of Gaming in 2017, joining Microsoft’s senior leadership team.
During his tenure, Spencer reshaped what Xbox stood for. He spearheaded Xbox Game Pass, which transformed how players access and pay for games, championed backwards compatibility, pushed for cross-platform play, and made accessibility a genuine priority across both hardware and software. All initiatives that the gaming industry has adopted since.
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His biggest and most defining move came with Microsoft’s $69 billion acquisition of Activision Blizzard King in 2022 — the largest deal in gaming history — following the $7.5 billion purchase of ZeniMax and Bethesda two years prior.
Last fall, I shared with Satya that I was thinking about stepping back and starting the next chapter of my life. From that moment, we aligned on approaching this transition with intention, ensuring stability, and strengthening the foundation we’ve built. Xbox has always been more than a business.
Xbox’s disastrous 2025 holiday season
Unfortunately, his final chapter wasn’t because turbulence. Xbox hardware struggled to gain ground against PlayStation. And a difficult 2025 holiday season—marked particularly by Xbox moving fewer units than the Kinect-style Nex Playground. That combined with two price hikes on ageing hardware and a hike in Xbox Game Pass Ultimate subscription costs — left the gaming division’s financials looking grim.
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Still, the studios Spencer built out have been delivering: a strong run of titles through 2024 and 2025 has steadied the ship creatively, and the 2026 lineup — including Fable, Gears of War: E-Day, Forza Horizon 6, and the Halo: Campaign Evolved remake — represents some of the most anticipated Xbox releases in years.
Who Replaces Phil Spencer at Xbox? Asha Sharma Named Microsoft Gaming CEO
Filling Spencer’s shoes is Asha Sharma, who takes on the title of Executive Vice President and CEO of Microsoft Gaming, reporting directly to Microsoft CEO Satya Nadella. Sharma joined Microsoft in 2024 to lead the company’s AI Platform, overseeing the infrastructure, foundation models, and tools behind Azure Machine Learning and Azure AI services. Before Microsoft, she served as COO of Instacart and VP of Product at Meta.
In her message, Sharma outlined three priorities for her Xbox tenure—making great games, recommitting to the core Xbox audience and console, and exploring new models for the future of play. Despite moving over from the AI division, she was notably direct about the role AI will—and won’t—play under her watch.
“We will not chase short-term efficiency or flood our ecosystem with soulless AI slop. Games are and always will be art, crafted by humans.” — Asha Sharma
Long-serving head of Xbox Game Studios, Matt Booty, has been promoted to Executive Vice President and Chief Content Officer, overseeing the creative side of the business. Booty, who has overseen the expansion of Xbox’s studio portfolio to nearly 40 teams across Xbox, Bethesda, Activision Blizzard, and King, will work closely alongside Sharma going forward.
Sarah Bond Resigns as Xbox President in Surprise Departure
Also departing is Sarah Bond, who had been widely regarded inside and outside of Microsoft as Spencer’s most likely successor at Xbox. Bond joined Microsoft in 2017 after stints at McKinsey and T-Mobile, working her way up through gaming partnerships and business development before becoming President of Xbox in October 2023 — the first woman to hold the role.
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During her time as President, she oversaw Xbox hardware, platform strategy, the expansion of Game Pass and cloud gaming, and played a visible role throughout the Activision Blizzard acquisition process. Her resignation comes as a surprise given her profile within the organisation. Spencer, in his note to staff, described her departure as a decision to “begin a new chapter,” and praised her contributions during what he called “a defining period for Xbox.”
As Xbox heads into its 25th anniversary year following Phil Spencer’s retirement, the pressure on Sharma is real — but so is the opportunity. With a strengthened games pipeline, a clear mandate to put players first, and an explicit promise to keep AI in its lane, the post-Spencer era of Microsoft Gaming is already staking out its identity. Whether it’s enough to restore Xbox’s standing in the console wars remains to be seen.
