Microsoft Gaming Overhaul: Phil Spencer Retires, Asha Sharma to Lead

Phil Spencer, Chief Executive of Microsoft Gaming, is set to retire, the company confirmed on Saturday (February 21). Satya Nadella announced the decision in an internal email to employees. Spencer will be succeeded by Asha Sharma, currently head of Microsoft’s CoreAI division. At the same time, Sarah Bond, President of Xbox, is also stepping down. The development was reported by Engadget.

In his message to staff, Nadella said he remains optimistic about gaming and its role in Microsoft’s broader consumer ambitions. He confirmed that Asha Sharma will assume the role of Executive Vice President and Chief Executive of Microsoft Gaming.

Sharma previously served as Chief Operating Officer at Instacart and as a Vice President at Meta. Nadella noted that her leadership experience and operational background would help drive the gaming business to new heights.

Spencer expressed support for Sharma in a social media post, saying he was thrilled for her and confident that the Xbox community would continue to be well served in the years ahead.

As part of the restructuring, Matt Booty, head of Xbox Game Studios, has been promoted to Chief Content Officer and will report directly to Sharma.

Meanwhile, Sarah Bond—widely seen as a potential successor to Spencer—will leave Microsoft to begin what the company described as a “new chapter.” Bond has not yet issued an official public statement regarding her departure.

Spencer joined Microsoft in 1988 and has been involved with Xbox since 2001. He took charge of the gaming brand in 2013, became Executive Vice President of Gaming in 2017, and was appointed Chief Executive of Microsoft Gaming in 2022. Among his most notable achievements were the launch of Xbox Game Pass and a series of major studio acquisitions between 2018 and 2022, including Double Fine and the $68.7 billion purchase of Activision Blizzard.

However, during the current console generation, Microsoft has struggled to keep pace with competitors such as Sony and Nintendo. The gaming division has undergone significant layoffs, reported declining revenues throughout 2025, and increased prices for consoles and Game Pass subscriptions.

Although Sharma’s email, referenced in Nadella’s announcement, did not detail a comprehensive roadmap, she pledged to continue delivering “great games,” prioritize core Xbox fans, and explore innovative business models for the future.

DBTech/BMT/OR