Microsoft gaming chief Phil Spencer retires, Asha Sharma replacing

Microsoft’s Gaming chief Phil Spencer is leaving the software maker after a 38-year tenure as the company faces growing challenges in its Xbox business.

“Last year, Phil Spencer made the decision to retire from the company, and we have been talking about succession planning ever since,” Microsoft CEO Satya Nadella wrote in a memo to employees published Friday. “I want to thank Phil for his outstanding leadership and partnership.”

While revenue from video games fell nearly 10% in the December quarter from a year earlier, it was a faster decline than the company expected, with total revenue rising about 17%. Microsoft disclosed an unspecified impairment charge on its gaming business in January.

The company made a $75 billion bet to expand its gaming business by acquiring Activision Blizzard in 2023 and launched Call of Duty games as a cloud service. But current-generation Xbox consoles aren’t as popular as they used to be Sony’s PlayStation or Nintendo’s Switch and Microsoft have shut down studios working on new games.

Spencer, who took over as head of Xbox in 2014 after running the company’s game studios, has nearly tripled Microsoft’s gaming business, in part through acquisitions like Activision Blizzard, Nadella said in his memo. Spencer also pushed for Microsoft to acquire Minecraft developer Mojang.

“For more than 38 years, including 12 years leading games at Microsoft, Phil has helped transform what we do and how we do it,” Nadella wrote.

Asha Sharma joining Microsoft in 2024 InstacartHe will replace Spencer as gaming CEO and report to Nadella. Until now, he served as head of product for Microsoft’s Core AI business. Meta manager Jay Parikh is running. Before coming to Instacart in 2021 and serving as chief operations officer, Sharma spent four years as vice president of product and engineering at Meta and two years in marketing at Microsoft.

“We will recommit to our core Xbox fans and players, those who have invested in us for the past 25 years, and the developers who have built the vast universes and experiences embraced by gamers around the world,” Sharma wrote in a message to Microsoft’s gaming employees.

He has worked on AI products like Foundry to incorporate AI models into third-party applications.

“As monetization and AI evolve and influence this future, we will not pursue short-term efficiency or flood our ecosystem with soulless AI,” Sharma wrote. “Games are and always will be art, crafted by humans and created with the most innovative technology provided by us.”

Matt Booty, head of Microsoft’s game studios, will report to Sharma as vice president and chief content officer.

“Together, Asha and Matt have the right combination of consumer products leadership and gaming depth to drive our platform innovation and content pipeline forward,” Nadella wrote.

Sarah Bond, president and chief operating officer of the Xbox unit, will leave Microsoft, Nadella said.

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