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After more than a decade leading Xbox, Phil Spencer is officially retiring, with Microsoft confirming that Asha Sharma will step in as the new CEO of Microsoft Gaming. At the same time, Xbox president Sarah Bond is leaving the company, while Matt Booty has been promoted to Chief Content Officer.

The news, reported by IGN and later confirmed through internal emails shared by Microsoft, marks one of the biggest leadership shake-ups in Xbox history, arriving just months before the brand’s 25th anniversary.

Phil Spencer Retirement Confirmed

Phil Spencer has been with Microsoft since 1988 and led Xbox since 2014. According to reporting by IGN, his retirement becomes effective on Monday, February 23.

In an email to staff, Spencer explained that he told Microsoft CEO Satya Nadella last fall that he was considering stepping back. He described the transition as deliberate and planned, saying Xbox “deserves a thoughtful, deliberate plan for the road ahead.” He will remain in an advisory role through the summer to support the handover.

Nadella publicly thanked Spencer for his 38 years at Microsoft, including 12 years leading Gaming. Under Spencer’s tenure, Microsoft expanded Xbox across PC, mobile, and cloud, nearly tripled the size of the business, and oversaw major acquisitions including Activision Blizzard, ZeniMax, and Mojang.

Spencer’s time in charge will likely be most remembered for the US$69 billion acquisition of Activision Blizzard King, which took nearly two years to clear global regulators. Before that, he had already begun reshaping Xbox’s first-party output through the ZeniMax acquisition and a wave of studio purchases starting in 2018.

Sarah Bond Departs Xbox

Sarah Bond, who many inside and outside Microsoft viewed as Spencer’s likely successor, has instead resigned from her role as Xbox president.

Bond joined Xbox in 2017 and became a key public face of the brand, especially during the Activision acquisition process and major hardware announcements. Spencer acknowledged her impact in his message, crediting her with shaping platform strategy, expanding Game Pass and cloud gaming, and guiding significant moments for the division.

Her departure adds another layer of change at a time when Xbox is already under commercial pressure following hardware price increases and subscription adjustments over the past year.

Asha Sharma Named CEO Of Microsoft Gaming

Asha Sharma will now serve as Executive Vice President and CEO of Microsoft Gaming, reporting directly to Nadella.

Sharma joined Microsoft in 2024 as President of CoreAI. Prior to that, she served as Chief Operating Officer at Instacart and held a Vice President role at Meta. Nadella described her as a leader experienced in building and scaling global consumer platforms that reach billions of people.

In her first message to staff as CEO, Sharma outlined three core commitments: great games, the return of Xbox, and the future of play.

On the games front, she emphasised empowering studios, investing in iconic franchises, and backing bold new ideas. She made it clear that great games must come first, before any broader strategic ambitions.

On hardware and platform identity, she spoke about recommitting to Xbox’s console roots while continuing to expand across PC, mobile, and cloud. She stressed that Xbox should feel seamless across devices, without being limited to a single piece of hardware.

Finally, she addressed the role of AI and monetisation. Sharma explicitly stated that Microsoft would not flood its ecosystem with “soulless AI slop” and reaffirmed that games are art crafted by humans, even as technology evolves.

Matt Booty Promoted To Chief Content Officer

Matt Booty has been promoted to Executive Vice President and Chief Content Officer, reporting to Sharma.

Booty has overseen Xbox Game Studios through a period of significant expansion. Under his leadership, Microsoft Gaming now spans nearly 40 studios across Xbox, Bethesda, Activision Blizzard, and King, covering franchises such as Halo, The Elder Scrolls, Call of Duty, World of Warcraft, Diablo, Candy Crush, and Fallout.

In his message to staff, Booty confirmed there are no organisational changes underway for the studios. He framed his new role around supporting existing teams and maintaining momentum across a pipeline that includes established franchises and newer projects.

The State Of Xbox Heading Into Its 25th Year

Xbox enters this transition at a complex moment.

Spencer’s tenure included major successes, such as backwards compatibility initiatives, the creation of Xbox Game Pass, and the expansion of Xbox Play Anywhere. However, the Xbox Series X and Series S generation faced a slow start, compounded by pandemic disruptions and uneven first-party output early in the cycle.

Recent years have shown stronger release cadence, with high-profile titles landing in 2024 and 2025 and a 2026 slate that includes major franchise entries. At the same time, rising hardware costs, subscription price increases, and tighter margin expectations from Microsoft have added pressure to the division.

Sharma now inherits a vastly expanded portfolio compared to the post-Xbox One reset era, but also a more commercially demanding environment.

With Spencer stepping away just shy of Xbox’s 25th anniversary, the leadership change signals both an end of an era and a recalibration. Whether this marks a renewed focus on console identity, a deeper AI integration strategy, or a broader platform evolution will become clearer as Microsoft Gaming moves into its next chapter.