Phil Spencer Retires, Asha Sharma to Lead Microsoft Gaming

Microsoft has announced a major leadership change in its gaming division as longtime executive Phil Spencer prepares to retire after 38 years with the company.

Spencer, who currently heads Microsoft Gaming, will step down and remain in an advisory role through the summer to ensure a smooth transition. Microsoft CEO Satya Nadella said that Spencer had decided last year to retire, and succession planning has been underway since then.

Asha Sharma has been appointed as Executive Vice President and CEO of Microsoft’s gaming division. She previously led product development for AI models and services at Microsoft. Before that, Sharma worked at Meta and online grocery delivery company Instacart.

In her first remarks after the appointment, Sharma said she plans to renew focus on the Xbox console and “recommit to our core Xbox fans and players.”

The leadership change comes at a challenging time for Microsoft’s gaming business. The division has been facing cost pressures due to tariffs, strong competition, and uncertain consumer spending. These factors have led to price increases for Xbox hardware.

Last month, Microsoft reported that gaming revenue fell about 9.5% in the December quarter. The company also recorded undisclosed impairment charges in the gaming unit.

Microsoft significantly expanded its presence in the gaming market after completing its $69 billion acquisition of Activision Blizzard, the maker of “Call of Duty,” in 2023. The deal followed heavy regulatory scrutiny before approval.

Despite the acquisition, Microsoft continues to face strong competition from Sony’s PlayStation, especially in terms of console market share and exclusive game titles.

In other leadership updates, Sarah Bond, president and chief operating officer at Xbox, is leaving the company to begin a new chapter. Matt Booty has been appointed Executive Vice President and Chief Content Officer of the gaming division. Booty, who was previously president of game content and studios at Microsoft, will report directly to Asha Sharma.

Industry analysts say the leadership shift comes at an important time as artificial intelligence plays a growing role in game development. According to D.A. Davidson analyst Gil Luria, Microsoft needs a new generation of leaders to manage the transition as AI becomes a bigger part of gaming technology.

The changes mark a new phase for Microsoft’s gaming business as it looks to strengthen Xbox and compete more effectively in the global gaming market.