Phil Spencer Retiring From Xbox, Asha Sharma to Become New Microsoft Gaming CEO – Rumor

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The biggest news this week was Sony closing Bluepoint Games, but Microsoft is likely to dominate headlines next week. Reports suggest Microsoft Gaming CEO Phil Spencer will retire on February 23rd, with Asha Sharma, currently President of CoreAI at Microsoft, taking his place. Sarah Bond, who leads the Xbox team, is also reportedly leaving, and Matt Booty, previously in charge of Xbox Game Studios, will be promoted to oversee all content.

In emails to Microsoft employees (also seen by Game File), CEO Satya Nadella praised Phil Spencer for his “remarkable leadership and collaboration.” Nadella noted that during Spencer’s 38 years with Microsoft—including 12 years heading the gaming division—he significantly changed the company’s approach and results.

According to reports, Spencer told Satya last fall that he was considering leaving to pursue new opportunities. They both agreed to plan a careful transition that would maintain stability and build on the success they’d achieved. Spencer emphasized that Xbox is more than just a company – it’s a passionate community of players, developers, and staff, and deserves a well-thought-out plan for the future.

Hey everyone, big news! Asha Sharma is officially the new CEO of Microsoft Gaming, and I want to give her a huge welcome. I’ve been working with her for a few months now, and I’m seriously impressed – she’s really curious, thinks things through clearly, and truly gets what players and creators need. We know this is a big deal for all of us – the fans, our partners, and the whole team – and we’re focused on making this transition as smooth as possible. I’ll be sticking around as an advisor for a bit this summer to help with the handover.

In an email to her team, Sharma explained that her top priority is to understand what’s working well and ensure its continued success. She outlined three key commitments to achieve this, starting with a focus on creating fantastic games. She emphasized that high-quality games, loved by players, are the foundation of everything they do – games with memorable characters, compelling stories, innovative gameplay, and exceptional creativity.

We’re committed to supporting our game studios, strengthening our most popular franchises, and taking chances on innovative new games. We won’t be afraid to try new things and expand into areas where we can truly make a difference for players. To demonstrate this commitment, I’ve promoted Matt Booty. He’s a skilled leader who understands the art of game development, has a proven track record of creating successful games, and is highly respected by developers in the industry.

As a longtime Xbox gamer, I was really hyped to hear they’re planning a big focus on what made Xbox great in the first place. Apparently, they’re promising a real “return to Xbox” – a recommitment to us, the players who’ve been with them for 25 years, and the developers who create the worlds we love. It sounds like they’re going back to basics, really celebrating where Xbox started, and doubling down on the console experience – the thing that connects us all and lets developers build those amazing games.

Gaming isn’t tied to just one device anymore – it’s available on everything. Xbox is growing to include PCs, phones, and the cloud, and we want the experience to be smooth, fast, and great for our players. We’re also making it easier for game creators to build games that everyone can enjoy, no matter where or how they play.

We’re also reimagining the future of play. We’re developing new ways to do business and new gaming experiences by building on our strengths – the beloved teams, characters, and worlds we’ve already created. However, we won’t just exploit these existing properties for profit. Instead, we’re creating a platform and tools that will allow both developers and players to build and share their own unique stories.

I was really glad to hear her talk about AI. She made it clear they’re not going to just throw a bunch of AI-generated stuff into the game for a quick buck. She said they believe games are art, made by people, and they’ll use new tech to help make that art, not replace the artists themselves. It’s cool to know they’re prioritizing quality and the human touch, even as things like monetization and AI change the industry.

We’re thrilled to welcome Asha as our new CEO. From our first discussions, it was clear she’s deeply committed to creating fantastic games, understanding that’s key to our success. She’s inquisitive, seeks clear explanations, and prioritizes the needs of both players and developers. This approach is crucial, as the gaming industry is constantly evolving – from how people play to how games are developed and monetized.

We’re optimistic about the future. This company and its locations have successfully handled challenges for years, thanks to our adaptable and dedicated teams who consistently deliver results. We’re confident because we have a solid base of successful brands, exciting new ventures, and strong evidence that people want what we’re creating.

The change in Xbox leadership happens at a challenging time for the company. While popular games like Forza Horizon 6 and the upcoming Fable have been released this year, Xbox has seen falling sales of its consoles for several quarters. Phil Spencer has also received criticism for closing down game development studios like The Initiative and canceling projects including Perfect Dark, Everwild, and a new game called Blackbird from ZeniMax.

Beyond those studio shutdowns, several developers like Tango Gameworks, Arkane Lyon, and Alpha Dog Games also closed, and many people lost their jobs. Even with successful initiatives like Game Pass, Microsoft faced criticism for increasing its prices.

Microsoft is planning a new Xbox console, internally called ‘Magnus,’ with a likely launch in 2027. This is part of a broader strategy to allow other hardware manufacturers to create and sell different versions of the Xbox at various price points. With Sarah Bond now leading Xbox, it’s unclear exactly how this plan will unfold, but it could signal a turning point for the console’s future.

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2026-02-21 00:12