Microsoft Gaming CEO Phil Spencer Retires, Asha Sharma Takes Over Xbox

Major leadership shakeup at Microsoft's gaming division as Phil Spencer steps down after 38 years.

Published on Feb. 21, 2026

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Phil Spencer, the longtime CEO of Microsoft Gaming and head of the Xbox division, is retiring after 38 years at the company. His right-hand executive, Sarah Bond, is also departing. Asha Sharma, previously the President of Microsoft's CoreAI product, has been named the new CEO of Microsoft Gaming. Matt Booty, the head of Xbox Game Studios, has been promoted to Chief Content Officer as part of the leadership changes.

Why it matters

This is a significant transition for Microsoft's gaming business as it prepares for the next generation of consoles. Spencer's retirement and the broader leadership shakeup come at a pivotal time, with rising hardware prices and rumors that Microsoft may shift away from gaming hardware to focus more on game development and the Game Pass subscription service.

The details

In his farewell message, Spencer reflected on his 38-year journey at Microsoft, saying he's ready to begin the next chapter of his life. Sharma, the new CEO, has committed to a three-part strategy: delivering great games, returning Xbox to prominence, and shaping the future of play. As part of the transition, Booty has been promoted to Chief Content Officer to work closely with Sharma in driving the company's gaming vision.

  • Phil Spencer announced his retirement on February 20, 2026.
  • The leadership changes will take effect on Monday, February 23, 2026.

The players

Phil Spencer

The retiring CEO of Microsoft Gaming and head of the Xbox division, who has been with Microsoft for 38 years.

Sarah Bond

The departing Xbox President, who was considered the heir apparent to Spencer.

Asha Sharma

The new CEO of Microsoft Gaming, previously the President of Microsoft's CoreAI product.

Matt Booty

The head of Xbox Game Studios, who has been promoted to Chief Content Officer as part of the leadership changes.

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What they’re 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.”

— Phil Spencer (Twitter)

“As part of this transition, Sarah Bond has decided to leave Microsoft to begin a new chapter. Sarah has been instrumental during a defining period for Xbox, shaping our platform strategy, expanding Game Pass and cloud gaming, supporting new hardware launches, and guiding some of the most significant moments in our history.”

— Phil Spencer (Twitter)

“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. 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.”

— Asha Sharma, CEO of Microsoft Gaming (Twitter)

What’s next

The leadership changes at Microsoft Gaming and Xbox will take effect on Monday, February 23, 2026, as Phil Spencer steps down and Asha Sharma takes over as the new CEO.

The takeaway

This major shakeup in Microsoft's gaming leadership comes at a critical juncture for the Xbox brand, as the company navigates rising hardware costs and considers shifting its focus more towards game development and subscription services like Game Pass. The new CEO, Asha Sharma, has laid out an ambitious vision centered on delivering great games, returning Xbox to prominence, and shaping the future of play.