A significant leadership restructuring is underway at Microsoft Gaming as Xbox chief Phil Spencer departs the company after a distinguished career spanning nearly four decades. Concurrently, Xbox president Sarah Bond is also stepping down. Asha Sharma, currently serving as president of CoreAI product, will assume the pivotal role of CEO of Microsoft Gaming, marking a major transition for Microsoft's extensive gaming initiatives.
Microsoft CEO Satya Nadella conveyed Phil Spencer's retirement to all employees via an internal memo today. Nadella revealed, "Last year, Phil Spencer made the decision to retire from the company, and since then we’ve been talking about succession planning." He extended gratitude, stating, "I want to thank Phil for his extraordinary leadership and partnership. Over 38 years at Microsoft, including 12 years leading Gaming, Phil helped transform what we do and how we do it."
Asha Sharma will succeed Phil Spencer as the new Microsoft Gaming CEO. Having rejoined Microsoft in 2024, Sharma currently leads as president of CoreAI product and has been deeply involved in the company's AI platform initiatives. Spencer will facilitate a smooth transition by remaining in an advisory capacity throughout the summer.
While Sharma may not possess Spencer's background as a lifelong gamer, her extensive consumer-focused experience is expected to be highly beneficial in leading a division the scale of Microsoft Gaming. Her career prior to rejoining Microsoft in 2024 includes a marketing role at Microsoft (leaving in 2013), serving as VP of product and engineering at Meta, and holding the position of chief operating officer at Instacart.
Nadella expressed strong confidence in the future of gaming, stating he is "long on gaming and its role at the center of our consumer ambition." He believes Sharma brings "deep experience building and growing platforms, aligning business models to long-term value, and operating at global scale," qualities he deems critical for guiding the gaming business into its next phase of expansion.
Sharma has outlined three core commitments for the future of gaming at Microsoft: delivering great games, ensuring the resurgence of Xbox, and shaping the future of play. In an internal memo, she declared, "We will recommit to our core Xbox fans and players, those who have invested with us for the past 25 years, and to the developers who build the expansive universes and experiences that are embraced by players across the world." She further emphasized, "We will celebrate our roots with a renewed commitment to Xbox starting with console which has shaped who we are. It connects us to the players and fans who invest in Xbox, and to the developers who build ambitious experiences for it.”
In a separate memo addressed to Xbox employees, Spencer disclosed that his decision to retire from Microsoft was made in the fall of 2025. This revelation comes months after online speculation regarding his potential departure, which Microsoft had previously dismissed in July by stating Spencer was “not retiring anytime soon.”
Spencer elaborated, saying, “Last fall, I shared with Satya that I was thinking about stepping back and starting the next chapter of my life.” He added, “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.”
Regarding the future trajectory for Xbox, Spencer confirmed that President Sarah Bond is also departing Microsoft to “begin a new chapter.” He commended her contributions, stating, “Sarah has been instrumental during a defining period for Xbox, shaping our platform strategy, expanding Game Pass and cloud gaming, supporting new hardware launches, and guiding some of the most significant moments in our history.”
Further changes include the promotion of Matt Booty to EVP and chief content officer, building on his previous elevation to president of game content and studios in 2023. In an internal memo to gaming employees, Booty expressed, “I read Phil’s note with much gratitude. He has been a steady champion for game creators and our studio teams, and I’ve learned so much from his leadership over the years. All our games have benefited from his foundational support.”
Phil Spencer’s full retirement memo offers additional insights into his departure.
Spencer's tenure at Microsoft began as an intern in June 1988. His early contributions included work on products like Encarta, Microsoft Money, and Microsoft Works. He transitioned to the Xbox division in 2001, rising to general manager of Microsoft Studios in 2008, before assuming leadership of the entire Xbox division in 2014. In this role, he notably oversaw the successful launch of the Xbox Series X/S consoles and spearheaded the significant expansion of Microsoft’s Xbox Game Pass service.
Furthermore, Spencer was pivotal in orchestrating Microsoft’s major gaming acquisitions, which include Mojang (the creators of Minecraft), Activision Blizzard, and ZeniMax Media.
Reflecting on his career, Spencer remarked, “When I walked through Microsoft’s doors as an intern in June of 1988, I could never have imagined the products I’d help build, the players and customers we’d serve, or the extraordinary teams I’d be lucky enough to join.” He concluded, “It’s been an epic ride and truly the privilege of a lifetime.”
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