Microsoft Gaming CEO Phil Spencer, who has led the company’s gaming efforts and its Xbox division for 12 years, has resigned. Spencer spent over 38 years at the company, overseeing deals like the $68.7 billion acquisition of Call of Duty and Overwatch publisher Activision Blizzard.
Spencer is set to be replaced by Asha Sharma, who currently leads Microsoft’s CoreAI division and has had stints in senior roles at Meta and Instacart.
In her introductory note, Sharma promised the “return of Xbox,” though she didn’t give a date for when any new physical hardware may be released. Sharma also announced a renewed commitment to multi-platform gaming, saying gaming “now lives across devices, not within the limits of any single piece of hardware.”
“We will break down barriers so developers can build once and reach players everywhere without compromise.”
Spencer’s departure wasn’t the only major shake-up among the ranks of Microsoft gaming management. Xbox President Sarah Bond also resigned, and Xbox Studios Head Matt Booty was promoted to Executive Vice President and Chief Content Officer.
Booty says “no organizational changes are underway” at Xbox Studios and that his “focus is on supporting the teams and leaders” it already has in place.
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The news comes amid what could be one of the most challenging periods in Xbox’s recent history. Xbox Series console sales fell 70% year-over-year during the 2025 holiday period, Mat Piscatella, a senior director at market research firm Circana, tells IGN. Meanwhile, the PS5 fell 40% year-over-year, while sales of the newly released Nintendo Switch 2 combined with Switch 1 were down 10% compared with sales of Switch 1 alone last year.
Recent years have also seen significant layoffs for Microsoft’s gaming division, with 650 roles across teams being axed on Spencer’s watch in November 2024.
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