One of the video game sector’s biggest players is undergoing a management transition.
Phil Spencer, who joined Microsoft as an intern in 1988 and has led its Xbox video game unit since 2014, is retiring.
Asha Sharma will become EVP and CEO. Matt Booty will become EVP and Chief Content Officer, reporting to Sharma. Xbox President Sarah Bond has resigned.
The video game business has gotten more turbulent for the traditional console giants and major publishers as mobile and casual gaming keeps disrupting past business models. Ubisoft just announced a major strategic overhaul, and makers of tentpole games have experienced delays and challenges amid a rapidly evolving marketplace.
Hollywood has had an on-again/off-again relationship with gaming. At Microsoft, the two worlds came together for a brief stretch when the company brought in broadcast TV veterans Nancy Tellem and Jordan Levin to launch Xbox Entertainment Studios. The initiative was dissolved in 2014 during broad cutbacks and as Spencer established himself at the helm.
Microsoft doubled down on its long-term push into gaming in 2023, acquiring Activision Blizzard for $69 billion. But the latest versions of the Xbox console have lagged behind the Sony PlayStation and Nintendo’s revitalized Switch.
Gaming left a blemish on an otherwise strong set of fourth-quarter financial results. Revenue from video games declined 10% in the October-to-December quarter compared with the same period in 2024, diverting from total revenue’s 16% increase. Microsoft also said it would take an unspecified impairment charge related to gaming.
Sharma has spent the past two years at Microsoft. Previously, she was Chief Operating Officer at Instacart and a VP at Meta. “She brings deep experience building and growing platforms, aligning business models to long-term value, and operating at global scale, which will be critical in leading our gaming business into its next era of growth,” Microsoft CEO Satya Nadella wrote in a blog post about the changes. “As we celebrate Xbox’s 25th year, the opportunity and innovation agenda in front of us is expansive.”
Spencer said in the blog post that he began discussing the possibility of stepping down with Nadella last fall.
“It’s rare in life to know when a chapter is closing, but after 38 years at Microsoft, that moment has arrived for me,” Spencer wrote in a social media message. “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.”