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| Phil Spencer expanded Xbox’s first-party studio lineup during his time leading Microsoft Gaming. |
By Jon Scarr
Phil Spencer is retiring from his role leading gaming at Microsoft after nearly 40 years at the company and more than a decade in charge of Xbox. His retirement takes effect on February 23, 2026, with Spencer staying on in an advisory role through the summer to help with the transition.
The shake-up also includes Xbox president Sarah Bond leaving the company and a promotion for Matt Booty, who moves into a wider content role.
IGN first reported the news as an exclusive, confirming Spencer’s retirement, Bond’s resignation, and the promotion of Asha Sharma, currently head of CoreAI at Microsoft, to the top gaming role. Microsoft followed with internal emails from Satya Nadella, Spencer, Sharma, and Booty laying out how the new leadership structure will work.
Spencer’s note to staff describes Xbox as “a vibrant community” and says he decided last fall that he was ready to start the next chapter of his life, prompting months of succession planning. Nadella’s message credits Spencer with expanding Xbox across PC, mobile, and cloud, nearly tripling the size of the business, and steering acquisitions like Mojang, ZeniMax, and Activision Blizzard King.
Asha Sharma Moves From CoreAI Into Xbox Leadership
Taking over Spencer’s job is Asha Sharma, who becomes Executive Vice President and CEO of Microsoft Gaming and reports directly to Nadella. Sharma joined Microsoft in 2024 to lead CoreAI and previously held senior roles at Instacart and Meta working on large-scale consumer products.
In her first memo to staff, Sharma says her “first job is simple: understand what makes this work and protect it,” and then sets out three priorities. First, she puts the focus on great games, talking about memorable characters, strong stories, and inventive play. She says Microsoft will keep investing in established series while also taking risks on new ideas where they can add clear value for players.
Second, she talks about a “return of Xbox” with a renewed focus on the core Xbox audience and on console as the heart of the brand. She still calls out PC, mobile, and cloud as key parts of the future but says Xbox across devices should feel seamless and quick to access, and that developers should be able to build once and reach players everywhere.
Third, she looks to the future of play, pointing to new business models and community tools built around Xbox’s existing characters and worlds. As part of that, she draws a firm line on AI, promising that Microsoft “will not chase short-term efficiency or flood our ecosystem with soulless AI slop,” and stressing that games remain art created by people, with technology there to support them rather than replace them.
Sarah Bond Departs As Matt Booty Takes Over Content Leadership
Sarah Bond is leaving Microsoft as part of the same leadership shift. Bond joined Xbox leadership in 2017 and became president of Xbox in 2022, playing a key role in platform strategy, Game Pass growth, and recent hardware and cloud initiatives. Spencer’s memo thanks her for guiding Xbox through what he calls some of the most important moments in its history.
On the content side, Matt Booty is being promoted from his role running Xbox Game Studios to Executive Vice President and Chief Content Officer, reporting to Sharma. He will oversee games from almost 40 internal teams across Xbox, Bethesda, Activision Blizzard, and King, covering series such as Halo, The Elder Scrolls, Call of Duty, and Diablo.
In his own message to staff, Booty says there are no studio reorganisation plans linked to this move. He points to a strong slate of established series and newer projects already in development and says his focus is on supporting teams so they can keep delivering games while the wider business adjusts to the new leadership.
Xbox’s Next Chapter After The Spencer Era
This change arrives at a difficult moment for Xbox. The Xbox Series X|S generation has lagged behind its main console rival in hardware sales, and a rough 2025 holiday period followed price increases for both the consoles and Xbox Game Pass Ultimate. At the same time, Xbox has finally started to build a more regular release pattern, with recent and upcoming games including Call of Duty: Black Ops 6 and 7, Microsoft Flight Simulator 2024, Indiana Jones and the Great Circle, Forza Horizon 6, Fable, and Gears of War: E-Day.
Microsoft now controls one of the largest collections of studios and game series in the industry. Decisions about where those games launch, how Game Pass develops, and how cloud play fits into the wider Xbox ecosystem will all run through Sharma and her leadership team. Her early promise to put great games first, reconnect with long-time Xbox fans, and resist “soulless AI slop” sets a clear tone at a time when many people are wary of AI-generated content creeping into everything.
If you have built up an Xbox library across console, PC, and cloud, the short-term picture looks steady. Spencer will help with the handover through the summer, Booty keeps running content, and Microsoft says there are no studio cuts tied directly to this shift. The bigger changes will come later, as Sharma starts to put her own stamp on hardware plans, subscription strategy, and how tightly Xbox connects its gaming business to the rest of Microsoft’s AI work.
Right now, this marks the end of the Spencer era and the start of an Xbox run by a veteran platform and AI leader who, at least on day one, is saying what many players want to hear about games, creators, and long-term thinking. What that actually means for the games you play over the next few years is the part to watch.
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