Phil Spencer, the head of Xbox, is departing Microsoft after nearly four decades at the software giant. Xbox president Sarah Bond is also exiting the company, marking a significant reorganization in the leadership of Xbox and Microsoft’s gaming initiatives. Asha Sharma, currently serving as president of CoreAI product, will assume the role of CEO for Microsoft Gaming.
Today, Microsoft CEO Satya Nadella disclosed Phil Spencer’s retirement in an internal memo addressed to all Microsoft personnel. Nadella stated, “Last year, Phil Spencer made the decision to retire from the company, and since then we’ve been talking about succession planning.” He added, “I want to thank Phil for his extraordinary leadership and partnership. Over 38 years at Microsoft, including 12 years leading Gaming, Phil helped transform what we do and how we do it.”
Asha Sharma is set to succeed Phil Spencer as the new Chief Executive Officer of Microsoft Gaming. Sharma presently serves as president of CoreAI product at Microsoft and has been deeply involved in Microsoft’s AI platform endeavors since her return to the company in 2024. Spencer will maintain an advisory capacity through the summer months to facilitate the handover.
While Sharma may not possess Spencer’s background as a gamer, her extensive consumer experience could prove highly beneficial in steering a division as expansive as Microsoft Gaming. Sharma left a marketing position at Microsoft in 2013, subsequently holding roles as VP of product and engineering at Meta and chief operating officer at Instacart before rejoining Microsoft in 2024.
Nadella expressed his strong belief in “gaming and its role at the center of our consumer ambition,” and is confident that Sharma brings “deep experience building and growing platforms, aligning business models to long-term value, and operating at global scale, which will be critical in leading our gaming business into its next era of growth.”
Sharma has articulated three key commitments for the future of gaming at Microsoft: delivering exceptional games, revitalizing Xbox, and innovating the future of play. In an internal communication, Sharma affirmed, “We will recommit to our core Xbox fans and players, those who have invested with us for the past 25 years, and to the developers who build the expansive universes and experiences that are embraced by players across the world.” She continued, “We will celebrate our roots with a renewed commitment to Xbox starting with console which has shaped who we are. It connects us to the players and fans who invest in Xbox, and to the developers who build ambitious experiences for it.”
In a separate message to Xbox employees, Spencer disclosed his decision to step down from Microsoft in the fall of 2025. This revelation comes just months after online speculation concerning his potential departure. Microsoft had previously stated in July that Spencer was “not retiring anytime soon.”
Spencer shared, “Last fall, I shared with Satya that I was thinking about stepping back and starting the next chapter of my life.” He elaborated, “From that moment, we aligned on approaching this transition with intention, ensuring stability, and strengthening the foundation we’ve built. Xbox has always been more than a business. It’s a vibrant community of players, creators, and teams who care deeply about what we build and how we build it. And it deserves a thoughtful, deliberate plan for the road ahead.”
As part of Xbox’s future trajectory, president Sarah Bond is also leaving Microsoft to “begin a new chapter,” as confirmed by Spencer. Spencer praised her contributions: “Sarah has been instrumental during a defining period for Xbox, shaping our platform strategy, expanding Game Pass and cloud gaming, supporting new hardware launches, and guiding some of the most significant moments in our history.”
Microsoft is also elevating Matt Booty to Executive Vice President and Chief Content Officer. This follows his earlier promotion in 2023 to an expanded role as president of game content and studios. In an internal memo to Microsoft’s gaming workforce, Booty expressed his sentiments: “I read Phil’s note with much gratitude. He has been a steady champion for game creators and our studio teams, and I’ve learned so much from his leadership over the years. All our games have benefited from his foundational support.”
You can access Phil Spencer’s complete retirement announcement here.
Spencer has been affiliated with Microsoft since his initial engagement as an intern in June 1988. During his early professional years at Microsoft, he contributed to products such as Encarta, Microsoft Money, and Microsoft Works. He joined the Xbox division in 2001, subsequently becoming the general manager of Microsoft Studios in 2008. By 2014, he assumed leadership of the Xbox division, overseeing the introduction of the Xbox Series X / S and the expansion of Microsoft’s Xbox Game Pass initiative.
Spencer also played a central role in Microsoft’s significant gaming acquisitions, which include Mojang, the creators of *Minecraft*; Activision Blizzard; and ZeniMax Media.
Spencer reflected, “When I walked through Microsoft’s doors as an intern in June of 1988, I could never have imagined the products I’d help build, the players and customers we’d serve, or the extraordinary teams I’d be lucky enough to join.” He concluded, “It’s been an epic ride and truly the privilege of a lifetime.”
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