Microsoft Gaming CEO Phil Spencer is retiring from the company and Xbox president Sarah Bond is leaving in a massive shakeup for the gaming giant.
Spencer had been with Microsoft since 1988, starting as an intern and rising through the ranks to become the overall head of gaming within Microsoft. IGN was first to report the news.
Shortly after it was made public, Spencer himself announced it via a post on Twitter, saying, “It’s rare in life to know when a chapter is closing, but after 38 years at Microsoft, that moment has arrived for me. I’ve made the decision to retire and begin the next chapter of my life. It’s a milestone that’s given me a chance to reflect on the incredible journey I’ve been fortunate enough to share with so many of you.”
Spencer will officially retire from Microsoft on Monday, February 23. Xbox president Sarah Bond is resigning from the company. She is also on the Tyson Foods board and gets $125,000 a year for that job, and many thousands of dollars more in stock. It appears that as recently as earlier today, Bond was still sharing content related to Xbox on LinkedIn.
Microsoft Gaming’s new CEO will be Asha Sharma, who is currently the president of Microsoft’s CoreAI division. Xbox Game Studios boss Matt Booty, meanwhile, is being promoted to become chief content officer at Xbox..
“I want to thank Phil for his extraordinary leadership and partnership,” Microsoft CEO Satya Nadella said in a memo to staff. “Over 38 years at Microsoft, including 12 years leading Gaming, Phil helped transform what we do and how we do it.”
Spencer said he told Nadella in Fall 2025 that he was contemplating “stepping back and starting the next chapter” of his life.
“From that moment, we aligned on approaching this transition with intention, ensuring stability, and strengthening the foundation we’ve built. 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,” he said.
Spencer added he has “tremendous confidence” that Sharma will be a good leader for the Xbox team going forward. “She brings genuine curiosity, clarity and a deep commitment to understanding players, creators, and the decisions that shape our future. We know this is an important moment for our fans, partners, and team, and we’re committed to getting it right,” Spencer said.
Spencer said he will “remain in an advisory role through the summer to support a smooth handoff.”
Sharma previously worked at Facebook owner Meta and was the former COO of Instacart. She joined Microsoft in 2024 and told staff in a memo that she wants to “understand what makes this work and protect it.”
“That starts with three commitments. First, great games. Everything begins here. We must have great games beloved by players before we do anything. Unforgettable characters, stories that make us feel, innovative game play, and creative excellence,” Sharma said. “We will empower our studios, invest in iconic franchises, and back bold new ideas. We will take risks. We will enter new categories and markets where we can add real value, grounded in what players care about most. I promoted Matt Booty in honor of this commitment. He understands the craft and the challenges of building great games, has led teams that deliver award-winning work, and has earned the trust of game developers across the industry.”
Sharma added that she is planning out “the return of Xbox,” and that includes re-committing to “core Xbox fans and players.”
“We will celebrate our roots with a renewed commitment to Xbox starting with console which has 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,” Sharma said.
Her memo went on to say that Microsoft plans to “expand across PC, mobile, and cloud,” with the aim of making Xbox feel “seamless, instant, and worthy of the communities we serve.”
She added: “We will break down barriers so developers can build once and reach players everywhere without compromise.:
Also in her memo, Sharma said the gaming industry is going through a “reinvention of play,” and for Xbox, that means the company plans to “invent new business models and new ways to play by leaning into what we already have: iconic teams, characters, and worlds that people love.”
“We will not chase short-term efficiency or flood our ecosystem with soulless AI slop.” — Asha Sharma
She added: “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.”
Also in her statement, Sharma said, “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.”
As for Booty, he said in his own memo to staff that he’s excited to work with Sharma and that he believes she is committed to “making great games.”
“We have good reasons to believe in what’s ahead. This organization and its franchises have navigated change for decades, and our strength comes from teams who know how to adapt and keep delivering,” Booty said. “That confidence is grounded in a strong pipeline of established franchises, new bets we believe in, and clear player demand for what we are building.”
These changes are happening during a massive year for Xbox, which celebrates its 25th anniversary this year. Microsoft has a big lineup of high-profile games on tap for this year, including Halo: Campaign Evolved, a Fable reboot, and Gears of War: E-Day, among others. Microsoft is also working on a next-generation Xbox console.
