Satya Nadella, Microsoft's CEO, revealed that Phil Spencer, head of Microsoft Gaming, will step down from his position. Asha Sharma, currently leading Microsoft's CoreAI unit, will succeed him in the role, while Sarah Bond, who serves as Xbox president, has decided to depart the company.
Nadella expressed strong optimism about gaming's central place in Microsoft's consumer strategy, announcing Sharma's appointment as Executive Vice President and CEO of Microsoft Gaming, directly under his supervision. He highlighted her recent two-year tenure at Microsoft, along with her prior experience as COO of Instacart and VP at Meta, where she expanded services to billions and fostered robust ecosystems for users and developers. Nadella emphasized her expertise in platform development, sustainable business strategies, and global operations, essential for guiding the gaming sector toward future expansion.
In posts on X, Spencer voiced support for Sharma's leadership transition. He described her entry into the CEO position as inspiring, noting the talented and dedicated teams focused on player satisfaction. Spencer indicated confidence in her approach of building on existing strengths to support Xbox users moving forward.
Matt Booty, presently overseeing Xbox Game Studios, advances to Chief Content Officer under Sharma's direction. Bond, often a visible representative for Xbox and viewed as a potential heir to Spencer, plans to pursue fresh opportunities outside the company. She has not yet commented publicly on her exit.
Spencer started at Microsoft in 1988 and engaged with Xbox projects starting around 2001. He took charge of the gaming division, including studios and subscription services, in 2013, advanced to Executive VP of Gaming in 2017, and rose to CEO of Microsoft Gaming in 2022. His tenure stands out for launching Game Pass, the subscription-based gaming service akin to Netflix, and orchestrating acquisitions between 2018 and 2022, such as indie developer Double Fine and the landmark $68.7 billion deal for Activision Blizzard King.
Despite a wealth of talent and intellectual property, Microsoft Gaming faces stiff competition from Sony and Nintendo in the ongoing console cycle. The division has endured significant staff reductions, persistent revenue declines through 2025, and recent hikes in prices for consoles and Game Pass Ultimate, which may complicate recovery efforts. Sharma steps into a challenging environment.
Sharma's internal message, referenced in Nadella's update, offers broad goals without specifics. She aims to focus on producing high-quality titles, renew dedication to loyal Xbox supporters, and explore innovative revenue streams and gameplay innovations. The effectiveness of these initiatives in revitalizing Xbox's trajectory is uncertain.