A shockwave in the video game industry: Phil Spencer, the longtime head of the Xbox brand, has announced his retirement after 38 years at Microsoft. He will be succeeded by Asha Sharma, the former head of product development in the CoreAI division. Xbox President Sarah Bond is also unexpectedly leaving the company, marking a complete reconstruction of the giant's leadership in the face of market challenges and declining revenue from the gaming segment.

Departure of the Brand Leader

Phil Spencer ends his 38-year career at Microsoft, leaving the Xbox brand at a moment of transformation.

Asha Sharma New CEO

An expert in artificial intelligence takes the helm at Microsoft Gaming, promising to protect game quality.

Resignation of Sarah Bond

The current Xbox President unexpectedly leaves the company alongside Spencer, amplifying the shock in the industry.

No Immediate Layoffs

Matt Booty declared that the executive-level personnel changes do not mean job cuts in development studios.

On Friday, February 20, 2026, Microsoft Corporation announced fundamental changes to the command structure of its gaming division. Phil Spencer, who has led the Xbox brand for the last 12 years and has been with the company since an internship in 1988, is retiring. His successor is Asha Sharma, a manager with extensive experience in the artificial intelligence sector. Sharma previously served as Chief Operating Officer at Instacart and worked at Meta, suggesting a new direction for the platform's development based on modern service technologies. The Xbox brand was launched in 2001 as Microsoft's response to the dominance of Sony and Nintendo in the console market. Under the leadership of Phil Spencer, who took the helm in 2014, the division underwent a transformation towards subscription services like Game Pass.The biggest surprise is the simultaneous resignation of Sarah Bond, the current Xbox President, who was widely considered the natural successor to Spencer. The new CEO, Asha Sharma, has already stated that she will not allow the ecosystem to be flooded with "soulless AI-generated content," which is meant to reassure fans worried about a decline in game quality. As part of the new structure, Matt Booty has been promoted to the position of Vice President of Content (Chief Content Officer). 38 years — this is how long Phil Spencer's career lasted within Microsoft's structuresDespite the drastic personnel changes, management is reassuring employees and investors. Matt Booty emphasized in an official statement that the reshuffling at the top does not mean direct layoffs in internal development studios. The decision to change leadership came at a difficult time for Xbox, characterized by a decline in revenue momentum. The new management team is tasked with integrating advanced artificial intelligence solutions with traditional entertainment while preserving the brand's unique identity. „We have zero tolerance for bad artificial intelligence and will not allow our ecosystem to be flooded by soulless, mass-produced AI content.” — Asha Sharma In recent years, Microsoft has made record-breaking acquisitions in the industry, including the purchase of Activision Blizzard for $69 billion, making it one of the largest game publishers in the world.

Mentioned People

  • Phil Spencer — Retiring Executive Director of Microsoft Gaming and the longtime public face of the Xbox brand.
  • Asha Sharma — Newly appointed CEO of Microsoft Gaming, previously head of AI products at the company.
  • Sarah Bond — Departing Xbox President, one of the key figures in the Microsoft Gaming leadership.
  • Satya Nadella — Chief Executive Officer (CEO) of the entire Microsoft corporation.
  • Matt Booty — Promoted to the position of Executive Vice President and Chief Content Officer in the gaming division.