Phil Spencer, the CEO of Microsoft’s $23 billion gaming business, is stepping down after 12 years at the helm. Stepping up is Asha Sharma, a Microsoft AI executive whose resume includes past stints at Instacart and Meta.
Spencer had made clear his intention to retire a year ago, Microsoft CEO Satya Nadella said in
an email to employees on Friday. But the leadership change signaled a pivot in strategy, with Sharma vowing to “recommit” to the Xbox console business. “We will celebrate our roots with a renewed commitment to Xbox starting with console, which has shaped who we are,” Sharma wrote in a note to staff. Sarah Bond, the President and COO of Xbox, who had been considered Spencer’s heir apparent, is also leaving the company.
While Spencer helped make the Xbox business into what it is today, Microsoft’s gaming business has struggled in recent years. Xbox hardware revenue has declined amid competition from Sony PlayStation and Nintendo Switch consoles, and Microsoft’s focus on games and PC games, including the $75 billion acquisition of Activision Blizzard, has faced challenges. Since 2024, Microsoft’s gaming business has laid off more than 2,500 employees,
Bloomberg reported citing an industry research firm.
The choice of Sharma, who has no experience in the gaming industry, fed speculation that Microsoft plans to “shove AI into everything at Xbox,”
as one wag commented on X. Perhaps anticipating the criticism, Sharma assured staff in her introductory note that “we will not chase short-term efficiency or flood our ecosystem with soulless AI slop.” —
AO 