The video game industry is undergoing a significant shift. Phil Spencer, CEO of Xbox (Microsoft’s gaming division) and a pivotal figure who has been with the company since 1988, is retiring, , according to reports. The change will be effective . Simultaneously, Xbox President Sarah Bond, widely considered a frontrunner to succeed Spencer, has resigned.
The departure of Spencer and Bond marks a substantial restructuring at Microsoft Gaming, a division encompassing nearly 40 development studios including Activision, Bethesda, Blizzard, King, Mojang, and Xbox Game Studios – responsible for major franchises like “Call of Duty,” “Candy Crush,” “Diablo,” “The Elder Scrolls,” “Fallout,” “Halo,” “Minecraft,” and “World of Warcraft,” as well as the Xbox console platform and related services.
Taking the helm as CEO of Microsoft Gaming will be Asha Sharma, previously President of Product Development for Microsoft’s CoreAI division. Sharma joined Microsoft in , having previously served as COO of Instacart and VP of Product at Meta. Matt Booty, head of Xbox Game Studios, has been promoted to Chief Content Officer, working closely with Sharma.
“Last fall, I shared with Satya that I was thinking about stepping back and starting the next chapter of my life,” Spencer wrote in an email to Microsoft staff. “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.”
Microsoft CEO Satya Nadella thanked Spencer for his leadership, stating, “Over 38 years at Microsoft, including 12 years leading Gaming, Phil helped transform what we do and how we do it.”
Sharma, in her initial statement, outlined her priorities: “My first job is simple: understand what makes this work and protect it. That starts with three commitments. First, great games. Everything begins here. We must have great games beloved by players before we do anything. Unforgettable characters, stories that make us feel, innovative game play, and creative excellence. We will support our studios, invest in iconic franchises, and champion new and bold ideas. We will take risks. We will enter new categories and markets where People can bring real value, grounded in what matters most to players. I’ve promoted Matt Booty in honor of this commitment. He understands the craft and the challenges of creating great games, has led teams that deliver award-winning work, and has earned the trust of game developers across the industry.”
Sharma also emphasized a renewed commitment to the core Xbox experience and expanding the platform beyond the console. “Second, a return to Xbox. We will renew our commitment to our core Xbox fans and players, those who have invested with us over the last 25 years, and to the developers who build the vast universes and experiences embraced by players around the world. We will celebrate our origins with a renewed commitment to Xbox, starting with the console that shaped our identity. This connects us with the players and fans who invest in Xbox and with the developers who build ambitious experiences for it.”
She continued, “Gaming now lives on more devices, not within the confines of a single piece of hardware. As we expand to PC, mobile, and the cloud, Xbox should deliver a seamless, instant, and worthy experience for the communities we serve. We will tear down barriers for developers to build once and reach players everywhere, without compromise.”
Finally, Sharma addressed the future of gaming, stating, “Third, the future of gaming. We are witnessing a reinvention of how we play. To rise to the moment, we will invent new business models and new ways to play, building on what we already have: iconic teams, characters, and worlds that people love. But we won’t treat those worlds as static intellectual property to simply squeeze for money and monetize. We will build a common platform and tools that empower developers and players to create and share their own stories. As monetization and AI evolve and influence this future, we will not chase short-term efficiency and flood our ecosystem with low-quality, soulless AI content. Games are, and will always be, art, created by people and powered by the most innovative technology we offer.”
Spencer’s legacy is marked by bold decisions, including the acquisitions of Bethesda for $7.5 billion and Activision-Blizzard for $69 billion. Under his leadership, the current generation of consoles launched and the Game Pass subscription service was established. However, his tenure concluded amidst reports of weak hardware sales, recent price increases for devices, and controversy surrounding Game Pass subscription costs.
Despite these challenges, Microsoft Gaming’s upcoming release slate appears poised to revitalize the company’s position. is shaping up to be a strong year, with highly anticipated titles in development, including a Forza Horizon 6, a continuation of the Fable universe, and a return to the origins of the Gears of War series. Fans are also anticipating the remake of the classic Halo game, Campaign Evolved.
