Xbox CEO Asha Sharma announced on X on Tuesday that the company is winding down its Copilot for Gaming feature on mobile and canceling its planned console launch.
Sharma also unveiled a broad leadership overhaul, bringing in four senior executives from her former CoreAI engineering group at Microsoft, according to an internal memo reported by CNBC. Sharma called the Copilot pullback part of a push to "retire features that don't align with where we're headed."
Xbox needs to move faster, deepen our connection with the community, and address friction for both players and developers.Today, we promoted leaders who helped build Xbox, while also bringing in new voices to help push us forward. This balance is important as we get the business…May 5, 2026
Microsoft first unveiled Copilot for Gaming at GDC in March 2025, positioning the AI assistant as a real-time sidekick that offers gameplay tips, coaching, and session recaps. A beta rolled out to the Xbox mobile app, then expanded to the PC Game Bar in September, and the ROG Xbox Ally handheld. Then came a privacy backlash in October after a user discovered that it was sending screen-activity data to Microsoft's servers by default.
Sharma hasn’t addressed the status of Gaming Copilot on the PC Game Bar or the ROG Xbox Ally handheld, leaving the future of those versions unclear. In the memo, Sharma wrote that Xbox needs to "evolve how we work" and acknowledged the division spends "too much time inward instead of with the community."
She appointed four executives from CoreAI: Jared Palmer, formerly VP of product at CoreAI and a senior VP at GitHub, will serve as VP of engineering and technical advisor to Sharma; Tim Allen, previously CoreAI's VP of design, becomes head of Xbox design; Jonathan McKay, who held growth roles at OpenAI and Meta before leading CoreAI growth, takes on the same function at Xbox; and Evan Chaki, a CoreAI general manager, will lead a new team focused on simplifying development workflows. A fifth hire, David Schloss, joins from Instacart to oversee Xbox's subscription and cloud business.
Two senior Xbox executives are departing. Kevin Gammill, corporate VP of gaming ecosystem organization, is leaving the company. Roanne Sones, corporate VP of Xbox devices and ecosystem, will take a leave of absence after the summer, then transition to an advisory role.
Sharma took over as Xbox CEO in February after Phil Spencer retired following 38 years at Microsoft. Since then, she has axed the "This is an Xbox" marketing campaign, cut Game Pass prices, rebranded Microsoft Gaming back to simply Xbox, and outlined a back-to-basics strategy focused on console and community. The leadership changes arrive as Xbox continues to struggle financially: gaming revenue fell to $5.3 billion in the most recent quarter, down from $5.7 billion a year earlier, and hardware revenue dropped 33%.
