Microsoft executive vice president and chief executive of gaming, Phil Spencer, is retiring after 38 years, and the Xbox crew is now bracing for another directional lurch.
Software King of the World Microsoft has promoted Asha Sharma, president of its CoreAI Product unit, to succeed Spencer as head of Microsoft Gaming.
Microsoft’s chief executive, Satya Nadella, told staff in an email that Spencer, 58, decided to retire last year and will stay for the next several months to handle the transition.
Nadella wrote, “Phil helped transform what we do and how we do it. I’ve long admired Phil’s unwavering commitment to players, creators, and his team, and I am personally grateful for his leadership and counsel.”
In an email to employees, Spencer wrote that last fall he shared with Nadella that he had thought about stepping back and “starting the next chapter of my life.”
Spencer was central to Microsoft’s acquisitions of Activision Blizzard and Minecraft, but his exit came after a wobble where Microsoft’s gaming division had lost momentum.
In its January earnings report, quarterly gaming revenue decreased nine per cent, hurt by sales in its struggling Xbox unit, and Xbox hardware revenue declined 32 per cent year on year.
Microsoft’s Gaming division has been squeezed by PlayStation and Nintendo’s Switch popularity, while analysts have said Xbox consoles and Game Pass are underperforming and being outmuscled by cheaper rivals like the Nex Playground active game system.
A portion of Vole’s Gaming organisation was laid off in 2025 as part of broader cuts that affected more than 15,000 workers.
A lifelong gamer, Spencer joined Microsoft in 1988 as an intern, became general manager of Microsoft Studios in 2003 and has run the gaming division for the last 12 years.
During his tenure, Spencer pushed Microsoft toward a focus on games played across devices and in the cloud, away from pure Xbox hardware.
In 2014, Mojang AB approached Spencer about a deal, and Microsoft eventually bought the company for $2.5 billion (€2.12 billion at about $1 = €0.846).
In 2022, Microsoft agreed to buy Activision Blizzard in an all-cash deal valued at about $75 billion (€63.45 billion at about $1 = €0.846), bringing in Call of Duty, World of Warcraft and Candy Crush, and the deal closed in October 2023.
As part of the shake-up, Microsoft Gaming’s executive vice president and chief content officer, Matt Booty, will keep that role and report to Sharma.
Xbox, president and chief operating officer, Sarah Bond, is leaving the company, despite being seen internally as a possible successor.
