Xbox chief Phil Spencer is leaving Microsoft

Xbox chief Phil Spencer is leaving Microsoft after nearly 40 years at the software giant. Xbox head Sarah Bond will also be leaving Microsoft, in what is a major change in management of Xbox and Microsoft’s gaming efforts. Asha Sharma, the current head of product for CoreAI, will take 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 we’ve been talking about succession planning ever since,” Nadella says. “I want to thank Phil for his exceptional leadership and partnership. Over his 38 years at Microsoft, including 12 years leading games, Phil has helped change what we do and how we do it.”

Asha Sharma will take over as the new CEO of Microsoft Gaming, succeeding Phil Spencer. Sharma currently serves as CoreAI Product Lead at Microsoft, working closely on Microsoft’s AI platform efforts since rejoining Microsoft in 2024. Spencer will remain in an advisory role through the summer to support the transition.

Although Sharma is not a gamer like Spencer, she does have some consumer experience that could certainly help lead a division as large as Microsoft Gaming. Sharma left his marketing role at Microsoft in 2013 and worked at Meta as vice president of product and engineering and Instacart as chief operating officer before returning to Microsoft in 2024.

Nadella says he has a “long-standing interest in gaming and its role at the heart of our consumer ambition,” and believes Sharma has “deep experience in building and growing platforms, aligning business models with long-term value, and operating on a global scale, which will be critical in leading our gaming business into the 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 gaming. “We will renew our commitment to our core Xbox fans and players, those who have invested with us over the past 25 years, and the developers who build the expansive universes and experiences that players around the world embrace,” Sharma says in an internal memo. “We will celebrate our roots with a renewed commitment to Xbox starting with the console that 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 has made the decision to retire from Microsoft in the fall of 2025, just months away Rumors spread online About Spencer’s possible retirement. Microsoft said in July that Spencer “will not be retiring anytime soon.”

“Last fall, I told Satya that I was thinking about stepping back and starting the next chapter of my life,” Spencer says. “From that moment, we agreed to approach this transformation with intention, ensure stability, and strengthen the foundation we had built. Xbox has always been more than just a business. It is a vibrant community of gamers, creators, and teams who care deeply about what we build and how we build it. And it deserves a thoughtful, deliberate plan for the way forward.”

As part of the road ahead for Xbox, president Sarah Bond will also be leaving Microsoft to “start a new chapter,” according to Spencer. “Sarah has played an instrumental role 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 important moments in our history,” says Spencer.

Microsoft is also promoting Matt Booty to executive vice president and chief content officer, up from previously Promote it to an expanded role as head of games content and studios in 2023. “I read Phil’s memo with great gratitude,” Booty says in an internal memo to Microsoft gaming employees. “He has been a consistent champion for our game creators and studio teams, and I have learned a lot from his leadership over the years. All of our games have benefited from his founding support.”

You can read Phil Spencer’s book Full retirement memo here.

Spencer has been at Microsoft since he first joined as an intern in 1988. Early in his career at Microsoft, he worked at Encarta, Microsoft Money, and Microsoft Works. Spencer joined the Xbox division in 2001, and became general manager of Microsoft Studios in 2008. He then became the leader of the Xbox division in 2014, where he oversaw the launch of Microsoft’s Xbox Series

Spencer has also been at the center of Microsoft’s major acquisitions in gaming, including… Minecraft Mojang Maker, Activision Blizzardand Zenimax media.

“When I walked into the doors of Microsoft as an intern in June of 1988, I never imagined the products I would help build, the players and customers we would serve, or the exceptional teams I would be lucky enough to join,” says Spencer. “It has been an epic journey and truly the privilege of a lifetime.”