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Microsoft has announced that gaming head Phil Spencer is retiring after 38 years at the software maker, in a major leadership shake-up.
The company named insider Asha Sharma as the executive vice president and CEO of the gaming division. In her previous role, Sharma led product development for AI models and services at Microsoft.
Sharma said she would renew focus on the Xbox console, aiming to “recommit to our core Xbox fans and players”.
Microsoft Gaming has been grappling with tariff-induced cost pressures, strong competition and uncertain consumer spending, prompting price rises on Xbox hardware.
Last month, Microsoft reported that its gaming revenue fell around 9.5% in the December quarter, and it recorded undisclosed impairment charges in the division.
Microsoft had closed its US$69-billion deal for Call of Duty maker Activision Blizzard in 2023, swelling its heft in the videogaming market after heavy regulatory scrutiny.
The company’s gaming unit contends with robust competition from Sony’s PlayStation, particularly regarding console market share and exclusive game offerings. Spencer said he would remain in an advisory role through the northern hemisphere summer to ensure a smooth handover.
‘New chapter’
“Last year, Phil Spencer made the decision to retire from the company, and since then we’ve been talking about succession planning,” Microsoft CEO Satya Nadella said.
The company also said Sarah Bond, president and chief operating officer at Xbox, is leaving the company “to begin a new chapter”.
Read: Microsoft’s winning formula may be starting to fray
Matt Booty has taken over the role of executive vice president and chief content officer at the gaming division, the company said. Booty was previously president of game content and studios at Microsoft, according to his LinkedIn page.
The company said Booty would report to Sharma, who previously worked at Meta and online grocery delivery firm Instacart.
“Microsoft’s leadership transition is appropriate as it comes at a time when the technology underlying gaming is shifting. As AI becomes a bigger element in game development, Microsoft needs a new generation of leaders to manage through this transition,” said DA Davidson analyst Gil Luria. — Jaspreet Singh, (c) 2026 Reuters
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