Microsoft Gaming Division Shakeup: Phil Spencer Retires, Sarah Bond Also Out, Asha Sharma Steps In as Xbox Lead

Microsoft Gaming is entering a new era as Phil Spencer, the long-time head of Xbox, announces his retirement after 38 years at the company. For those unaware, Spencer led Xbox for 12 years. During his tenure, Microsoft launched four main, consoles across two generations: the Xbox One S and One X (mid-gen refreshes), followed by the next-gen Xbox Series X, Series S, and last year’s ROG Xbox Ally handhelds. He also focused on Xbox Game Pass, cloud gaming, and massive acquisitions like Activision Blizzard.

Addressing staffs in an internal email seen by IGN, Spencer said:

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. It’s a vibrant community of players, creators, and teams who care deeply about what we build and how we build it. And it deserves a thoughtful, deliberate plan for the road ahead. Today marks an exciting new chapter for Microsoft Gaming as Asha Sharma steps into the role of CEO, and I want to be the first to welcome her to this incredible team. Working with her over the past several months has given me tremendous confidence. She brings genuine curiosity, clarity and a deep commitment to understanding players, creators, and the decisions that shape our future. We know this is an important moment for our fans, partners, and team, and we’re committed to getting it right. I’ll remain in an advisory role through the summer to support a smooth handoff.

Alongside him, Sarah Bond, Xbox president, is also leaving Microsoft, ending speculation about her succession. Asha Sharma, previously president of Microsoft’s CoreAI division, is stepping in to fill the Microsoft Gaming CEO role. To catch you up, Sharma joined Microsoft in 2024. In her first internal email she reportedly laid out three priorities for Xbox: great games, a return to core Xbox focus, and shaping the future of play across platforms.

Sharma emphasized that while AI and monetization will influence Xbox, the company won’t chase “short-term efficiency” or flood its ecosystem with low-quality AI content. She further commited to human-made games powered by innovative technology, hinting at a balanced approach between tech and artistry.

To ensure content and studio operations stay steady, Matt Booty, head of Xbox Game Studios, has been promoted to Executive Vice President and Chief Content Officer, who will now report directly to Sharma. Spencer, in his farewell note, called his time at Microsoft “an epic ride” and promised to cheer on the next chapter as a proud Xbox fan.