In major breaking news on Friday, Microsoft CEO Satya Nadella has announced that Micorosft Gaming CEO and head of Xbox Phil Spencer is retiring from the company.
In addition, Xbox President Sarah Bond has resigned.
First reported by IGN, Spencer’s retirement will be effective as of Monday, February 23. He leaves after spending 38 years with the company.
“I want to thank Phil for his extraordinary leadership and partnership,” Nadella said via email to Microsoft and Xbox staff. “Over 38 years at Microsoft, including 12 years leading Gaming, Phil helped transform what we do and how we do it. He expanded our reach across PC, mobile, and cloud; nearly tripled the size of the business; helped shape our strategy through the acquisitions of Activision Blizzard, ZeniMax, and Minecraft; and strengthened our culture across our studios and platforms.”
Spencer, in his memo to staff, said that he made it known last year that he was “thinking about stepping back and starting the next chapter of my life.”
“From that moment, we aligned on approaching this transition with intention, ensuring stability, and strengthening the foundation we’ve built,” he said. “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.”
Taking over as head of gaming for Microsoft is Asha Sharma. Sharma had previously been the head of CoreAI at Microsoft after joining the company in 2024. Matt Booty, who will remain with Xbox, is moving up to chief content officer.
In his first message to Xbox staff, Sharma said that they won’t flood the market with “soulless AI slop”.
“To meet the moment, we will invent new business models and new ways to play by leaning into what we already have: iconic teams, characters, and worlds that people love,” he wrote. “But we will not treat those worlds as static IP to milk and monetize. We will build a shared platform and tools that empower developers and players to create and share their own stories.
“As monetization and AI evolve and influence this future, we will not chase short-term efficiency or flood our ecosystem with soulless AI slop. Games are and always will be art, crafted by humans, and created with the most innovative technology provided by us.”
Mike has been covering the gaming industry since 2012, and has reported on some of the largest events in the industry while also working as an investigative reporter. Outside of…
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shame Xbox is only 2% of Microsoft’s revenue.
Aaron Greenberg especially should have been on this list how is he still employed? Matt Booty too they guy can’t run studios look how many games got cancelled now he’s CCO?