Xbox chief Phil Spencer is leaving Microsoft

Xbox chief Phil Spencer is leaving Microsoft after nearly 40 years at the software giant. Xbox president Sarah Bond is also leaving Microsoft, in what is a major shake-up to the management of Xbox and Microsoft’s gaming efforts. Asha Sharma, currently president of CoreAI product, is taking over as CEO of Microsoft Gaming.

Microsoft CEO Satya Nadella announced Phil Spencer’s retirement in a memo to all Microsoft employees today. “Last year, Phil Spencer made the decision to retire from the company, and since then we’ve been talking about succession planning,” says Nadella. “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 taking over from Phil Spencer as the new Microsoft Gaming CEO. Sharma is currently the president of CoreAI product at Microsoft, and has been working closely on Microsoft’s AI platform efforts since she rejoined Microsoft in 2024. Spencer will remain in an advisory role through the summer to support the transition.

While Sharma isn’t a gamer like Spencer, she does have some consumer experience that could certainly help with leading a division as big as Microsoft Gaming. Sharma left a marketing role at Microsoft in 2013 and has worked at Meta as VP of product and engineering and Instacart as chief operating officer before heading back to Microsoft in 2024.

Nadella says he’s “long on gaming and its role at the center of our consumer ambition,” and believes Sharma has “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 now has three commitments for the future of gaming at Microsoft: great games, the return of Xbox, and the future of play. “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,” says Sharma in an internal memo. “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 memo to Xbox employees, Spencer reveals that he made the decision to retire from Microsoft in the fall of 2025, just months after rumors circulated online about Spencer’s potential retirement. Microsoft said in July that Spencer was “not retiring anytime soon.”

”Last fall, I shared with Satya that I was thinking about stepping back and starting the next chapter of my life,” says Spencer. “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 the road ahead for Xbox, president Sarah Bond is also leaving Microsoft to “begin a new chapter,” according to Spencer. “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,” says Spencer.

Microsoft is also promoting Matt Booty to EVP and chief content officer, after previously promoting him to an expanded president of game content and studios position in 2023. “I read Phil’s note with much gratitude,” says Booty in an internal memo to Microsoft’s gaming employees. “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 read Phil Spencer’s full retirement memo here.

Spencer has been at Microsoft since he first joined as an intern in 1988. In his early career at Microsoft he worked on Encarta, Microsoft Money, and Microsoft Works. Spencer joined the Xbox division in 2001, and became the general manager of Microsoft Studios in 2008. He then became the leader of the Xbox division in 2014, overseeing the launch of the Xbox Series X / S and Microsoft’s Xbox Game Pass push.

Spencer has also been at the center of Microsoft’s major gaming acquisitions, including Minecraft maker Mojang, Activision Blizzard, and ZeniMax Media.

“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,” says Spencer. “It’s been an epic ride and truly the privilege of a lifetime.”