A shakeup at Microsoft has resulted in the departure of Phil Spencer as CEO of Microsoft Gaming, a move announced late Friday. The change in leadership comes alongside the resignation of Xbox President Sarah Bond and the promotion of Matt Booty to Chief Content Officer. Taking the helm as the new CEO of Microsoft Gaming is Asha Sharma, currently President of Microsoft’s CoreAI division.
A Planned Transition
Spencer’s retirement, effective , was a decision reached with Microsoft CEO Satya Nadella last fall. According to Spencer’s email to staff, the intention was to ensure a “thoughtful, deliberate plan for the road ahead.” Bond’s departure was not framed as a succession plan, but rather a concurrent exit with Spencer’s retirement.
From AI to Gaming: Introducing Asha Sharma
Asha Sharma’s appointment marks a significant shift in leadership for the gaming division. She joined Microsoft in and brings a background focused on product and artificial intelligence. Prior to Microsoft, Sharma held positions as VP of Product and Engineering at Meta and COO of Instacart, and served on the board of The Home Depot. Her experience centers on large-scale platforms and product development, a departure from a traditionally gaming-focused background.
Content Strategy Realignment
The leadership changes extend beyond the CEO position. Matt Booty, previously head of Xbox Game Studios, has been promoted to Chief Content Officer. This elevation positions Booty as a central figure in shaping the content strategy for Microsoft Gaming, particularly given the company’s extensive portfolio of studios and franchises, including Activision, Bethesda, Blizzard, King, Mojang, and Xbox Game Studios – responsible for titles like “Call of Duty,” “The Elder Scrolls,” “Halo,” and “Minecraft.”
Sharma’s Three-Pillar Vision
In her initial message to the team, Sharma outlined a three-pronged approach to guide Microsoft Gaming’s future. First, she emphasized a commitment to “great games,” focusing on memorable characters, compelling stories, and creative excellence. She pledged to empower studios, invest in iconic franchises, and support new ideas, highlighting Booty’s understanding of “the craft and the challenges of building great games.”
Second, Sharma reaffirmed the importance of the Xbox console, stating a commitment to “the return of Xbox” after 25 years. This signals a continued dedication to the console platform despite the growing prominence of cloud gaming and multi-device experiences. Finally, she outlined a vision for “the future of gaming,” exploring new business models and shared tools for developers and players across a diverse range of devices.
Navigating a Changing Landscape
The timing of these leadership changes comes amidst a period of shifting dynamics within the gaming industry. Microsoft’s recent acquisition of Activision Blizzard, valued at $75 billion, represents a substantial investment in the gaming space. However, the Xbox business experienced a nearly 10% revenue decline in the December quarter, a steeper drop than anticipated. The company also announced an unspecified impairment charge in its gaming business in January.
Sharma’s challenge will be to navigate these complexities and capitalize on Microsoft’s extensive assets. The success of her tenure will depend on the execution of her vision for great games, a revitalized console experience, and a forward-looking approach to the evolving gaming landscape. Spencer will remain in an advisory role through the summer, providing a period of transition and knowledge transfer. The focus now shifts to how Sharma and Booty will translate these plans into tangible results.
