Microsoft gaming chief Phil Spencer steps down after 38 years with company

Microsoft CoreAI exec Asha Sharma will take over in surprise executive shake-up.

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[ol1bit]

I think it's too late for xbox.

 

[graylshaped]

...stints at Meta and Instacart

Let me re-think my decision to walk away from console gaming very carefully in light of this bit of news...

Nope. I'm good.

 

[Elrabin]

It does not bode well that the new head of the gaming division

A) has less than two years at Microsoft
B) Was the head of Core AI at Microsoft

 

[lukipedia]

It does not bode well that the new head of the gaming division

A) has less than two years at Microsoft
B) Was the head of Core AI at Microsoft

And has no gaming experience in her CV at all.

Which wouldn’t in and of itself be disqualifying, except that based on her memo to employees, I’m not even sure she’s ever played a Xbox game. Just soulless corporate speak.

 

[thelee]

what the heck is going on over there?

 

[adespoton]

Well, Phil retiring isn't really a surprise. Most people's professional careers at a single company rarely last more than 35 years, and he did 38.

The position being filled by someone with Meta, InstaCart and Core AI on their CV? THAT is a bit of a shakeup.

 

[Urist]

And has no gaming experience in her CV at all.

Which wouldn’t in and of itself be disqualifying, except that based on her memo to employees, I’m not even sure she’s ever played a Xbox game. Just soulless corporate speak.

No need for experience when you can just use Copilot!!

 

[Morpho Resin]

Very sad news for one such as myself who bought into the Xbox ecosystem more than two decades ago. I'm very concerned about the Xbox brand although I accepted that console gaming has been on its death bed for years.

 

[UserNotFound]

As an owner of an Xbox series console, primarily for legacy reasons, all I can say is please just allow me to play my steam games on Xbox.

 

[fe3a8b63]

From now on, Asha Sharma, who currently serves as the company chief for the CoreAI product, will be taking on the new role as the CEO of Microsoft Gaming

God damn it.

M$ is trying to quadruple (fucktuple?) up on their AI effort?

From: https://www.techpowerup.com/345803/microsoft-seeks-to-rebuild-community-trust-in-windows-11 (Microsoft Seeks to Rebuild Community Trust in Windows 11)

to: https://www.techpowerup.com/345893/...where-in-windows-11-to-focus-on-core-features (Microsoft Steps Back from "AI Everywhere" in Windows 11 to Focus on Core Features)

to: https://www.techpowerup.com/346546/...dows-11-running-in-task-bar-and-file-explorer (Microsoft Shows AI Integration in Windows 11 Running in Task Bar and File Explorer)

WTF is going on over at M$

 

[denemo]

Press F to pay respect for Xbox.

 

[laitpojes]

This should be totally awesome!

/s

 

[Elrabin]

Well, we'll see. Leaders with different perspectives are fine, as long as they listen to the folks near the work. Xbox revenue has doubled over the last decade, granted part of that is due to acquisition contribution. The overall gaming market only grew by about 88% in the same time period. So for all the teeth grinding and (alleged) xbox player revolts over decisions the business looks healthy to me. And doing the same old crap of buying out games to offer as an exclusive on a console seems like it's time is over. So we'll see if they can offer something compelling.

Focus less on the last decade and more on the last year or two.

They're significantly down in that time frame

 

[for.the.republic]

Press F to pay respect for Xbox.

F

 

[IceStorm]

Not hopeful after reading her corpo-speak letter.

If Phil has his bag, then by all means he should retire, I have no qualms with that. Sarah Bond not taking over, however, shows something is rotten inside Microsoft. My guess is that it's pro-Slop vs anti-Slop factions, and it's clear which side Nadella's on.

 

[irnoob]

Why was someone so obviously unqualified (no gaming experience at all) selected? What the hell are they doing over there?

 

[freakout87]

Oh god, an AI exec?

This sucks. Probably not for Spencer, who I think was likely not pleased to have to eat shit sandwiches like jacking up the price of Game Pass and console hardware, or executing mass layoffs these last couple of years. But for the rest of us, he championed consumer-friendly initiatives that I found really valuable. Play Anywhere, Game Pass, Smart Delivery, and backwards compatibility all happened under his watch. He pushed hard on improving the PC experience. He also played games himself and understood where a lot of the pain points were.

Fanboys invested in brand wars hated it, but Spencer's pushing Microsoft towards becoming a multi-platform publisher also gives us all more choice in the long run. People say it's going to kill Xbox, ignoring the elephant in the room that that already happened when previous management fucked up the Xbox One launch and sent a generation of gamers to build digital libraries on other platforms. They were never coming back, and the Xbox Series trailing the PS5 so drastically in sales is the proof. Xbox is going to become a bespoke gaming PC brand in the future, which TBH I'm totally cool with, since it'll let me buy games from whatever store offers the best deal as opposed to having to decide based on which games are locked to the hardware.

Armchair CEOs in comments sections across the Internet have given him a hard time for awhile now for various reasons. But I'll remember him fondly as someone who drove hard to break down the walls of platform exclusivity and made my gaming dollar go further.

 

[NWade]

So MS makes massive cuts to XBox over the last year, in order to prioritize its spend and ambitions on AI. Then it puts an AI executive in charge of gaming. Saying they won't push slop is a pretty big "Trust me, bro" statement to make.

And for those who don't speak Corporate, Sharma saying "...created with the most innovative technology..." is a reference to AI tools & AI-generated content.

 

[freakout87]

It is also worth noting that although an AI exec does not bode well, Spencer himself had no gaming experience when he originally became head of Microsoft Game Studios. Nor did Nintendo's Reggie Fils-Aime, who worked at places like Proctor & Gamble and Pizza Hut.

 

[HoorayForEverything]

Does anyone else feel that Sharma leaving the AI division is the lede here? I mean we knew Spencer was going at some point and we knew XBox would get a shakeup. This is just the other shoe dropping.

And we knew MS were making some major changes of direction with "AI" too but CoreAI has only been there a year and is supposed to be their agentic strategy... On YouTube you can watch hours of Sharma pitching this, just six months ago.

 

[bman212121]

If I'm not mistaken Phil was also played a big part in Microsoft spending $2.5B for Minecraft. At the time it was a crazy amount of money for an indie game, but seeing how it worked out shows some great insight.

 

[freakout87]

I think it's too late for xbox.

Too late for... what? To succeed as an exclusive console hardware platform, certainly. But that writing has been on the wall for years now. Spencer and Bond made no secret of it. But if the aim is to just sell games, accessories and subscriptions to as many people as possible, it looks to me like they have more opportunity than ever. Xbox Game Studios titles regularly top the PlayStation and Steam charts, and more of them will be appearing on the Switch 2 as time goes by.

While 34 million Xbox Series consoles sold doesn't come close to PS5's 90 mil, that's still a lot of existing customers who probably have digital purchases and Game Pass subscriptions who might want to hang onto all that when it's time for the next generation. The real danger is that the next "Xbox" (really just a bespoke gaming PC like the Steam Machine) is too damn expensive for those people to upgrade to or tempt new PC buyers thanks to the component supply crunch, IMO.

 

[gijames1225]

Spencer and Bond oversaw the implosion of an incredibly promising brand, but that Microsoft is putting someone with no experience in games and a background in AI and Meta hardware in charge means it's probably going to get even worse.

I finally bought a PS5 two months back, after owning and mostly focusing on every Xbox since the OG. There's just not future to the platform and spending money continuing to build a digital library seemed absurd (and I refuse to rent my games for $30 a month).

 

[IrishMonkee]

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.

The only part of this statement from her that I find believable is that they'll invest in iconic franchises... or they'll go and buy another gaming company out. But they're on the clock and need to complete it before this admin changes. Microsoft didn't pay Trump part of the money needed for the WH East Wing demolition and planned ballroom for nothing.

 

[Findecanor]

I'd admit that my attention for news about XBox has slipped a little because I'm not a gamer.

With Microsoft's tendency to reuse their brands for various things from all over the company, I don't even know what "XBox" is supposed to be now.

What is she actually taking over?

 

[cfenton]

Very sad news for one such as myself who bought into the Xbox ecosystem more than two decades ago. I'm very concerned about the Xbox brand although I accepted that console gaming has been on its death bed for years.

How is console gaming on it's deathbed? The PS5 has sold a lot, and the Switch 2 has been doing very well so far. Even the Xbox Series has done reasonably well, historically speaking, if not up to Microsoft's expectations.

 

[Pugilistas]

Spencer was a net negative in my book. Many years of bad calls. Had a load of quotes from his tenure that did not age well. Didn't know the territory.

No clue about the new boss: Maybe she's good at organization, and will listen to folks who know the terrain. Of course, it is Microsoft...

 

[sarusa]

what the heck is going on over there?

WTF is going on over at M$

Satya Nadella is on the email list of Desi CEOs and they all got the email that they all need to go 100% into AI and this is what he has been doing (of course they're not the only ones). He does not care if their entire product line completely goes to shit (as it has been doing, almost without exception, since 2021) as long as he can cram 'AI' sideways up the ass of everything and MS is 'in the lead' when Copilot suddenly achieves AGI deep inside everything's ass (which it can't possibly do).

Some of the very few Microslop products that hadn't completely gone to shit were a few of the game studios like Obsidian that had managed to avoid ensloppification. This looks like the end of that.

 

[solomonrex]

It is also worth noting that although an AI exec does not bode well, Spencer himself had no gaming experience when he originally became head of Microsoft Game Studios. Nor did Nintendo's Reggie Fils-Aime, who worked at places like Proctor & Gamble and Pizza Hut.

Ok but thirty years ago, it was very common not to have that experience, that was a billion gamers ago. I don’t know what their plans are, and Spencer was there for the recent nonsense, but it doesn’t look good.

They have the entire Activision company and Xbox div and they didn’t hire from within?

 

[no_free_lunches_for_ai]

It is also worth noting that although an AI exec does not bode well, Spencer himself had no gaming experience when he originally became head of Microsoft Game Studios. Nor did Nintendo's Reggie Fils-Aime, who worked at places like Proctor & Gamble and Pizza Hut.

WhileI think public opinion of Reggie is/was very positive; I personally don't think he did very much other than put on a really good public face. To me it seemed like mostly the lawyers and Nintendo Japan ran Nintendo US.

And while Spencer might have had a positive start to his tenure (in terms of public opinion); I think he's been in the negatives for at least the last 5-8 years. And personally I don't think he's done very well over the entirety of his tenure as CEO.

So not quite the example I think you are probably trying to go for.

 

[Safranin O]

I've been patiently waiting for Phil to leave or take a backseat because I didn't think Xbox was living up to their potential, especially after all of the acquisitions. I still think he should've stepped down sooner. But somehow, his replacement fills me with even less confidence?

Modern Microsoft really is the lead author in the paper on how to squander goodwill. Windows 10 to 11, and Xbox One to the (terribly named) Xbox Series. Even Surface went from "shining beacon of Windows" to "all but dead" :/

 

[Waluigi]

Going through her LinkedIn history, she's had precisely 0 years and 0 months experience in gaming related roles. To be fair, she also had 0 years and 0 months experience in AI related roles too, and she managed to make AI at Microsoft.... oh right.

 

[Hammer_Thyme]

But no reporting on the biggest State of play ever?

Nor even Sony potentially shuttering a studio?

I feel like Ars' gaming coverage has become concerningly anaemic, where its auto coverage is growing increasingly broad.

I, for one, would appreciate those two priorities swapping.

 

[Waluigi]

It is also worth noting that although an AI exec does not bode well, Spencer himself had no gaming experience when he originally became head of Microsoft Game Studios

He had 11 years of experience.

Spencer, who got his start at Microsoft as an intern in 1988, served as a manager and executive at Microsoft Game Studios in 2003. In 2014, he took over as Head of Xbox,

 

[dragonzord]

Spencer was a likeable dude but he seems very incapable of delivering big things from Xbox, certainly not enough to win back the crowd after Matrick. Microsoft as a whole has no really consumer driven leaders. It's all about buzzwords and shareholders since Satya took over, but they can only milk old goodwill so long, gaming for far less time than Windows.

 

[stony3k]

WTF is going on over at M$

Of all the tech execs pushing AI, I get the feeling that Satya is a true believer and will keep pushing AI until the end. Too bad since I used to admire him

 

[bman212121]

Fun fact, I was really curious about how big "Xbox" as a brand really is. It's really easy to underestimate it because it's just a division under Microsoft, but their revenue for 2025 was around 23 Billion.

https://www.statista.com/statistics/963263/microsoft-annual-gaming-revenue/

If they were their own company, they would rank just inside of the top 200 out of Fortune 500 companies, right next to companies like Adobe, Colgate-Palmolive, General Mills, Discover, Black Rock, etc. I'd guess some of those companies have more assets than Xbox has, but it's an interesting thing thinking about how big that division really is.

https://us500.com/fortune-500-companies


EDIT: The list has Microsoft at $245B in revenue, meaning the gaming division is still only around 10% of the companies revenue.