Xbox CEO Phil Spencer Announces Retirement

President Sarah Bond also resigns as AI exec Asha Sharma takes over as new Xbox CEO

Published on Feb. 20, 2026

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Phil Spencer, the long-time head of Xbox, has announced his retirement after 38 years at Microsoft. His departure comes just as Xbox is about to celebrate its 25th anniversary. Microsoft CEO Satya Nadella praised Spencer's contributions in transforming the Xbox division. Asha Sharma, the current President of Microsoft's CoreAI product, will replace Spencer as the new Xbox CEO. Sharma has committed to continuing the Xbox legacy and improving upon it during a "period of rapid change" as gaming expands across devices beyond just consoles.

Why it matters

This executive shakeup at Xbox comes at a critical time for the gaming division, which has faced declining revenue and gamer discontent over recent price hikes. The transition to Sharma, an AI executive, raises questions about the future direction of Xbox as it looks to expand beyond traditional consoles into a more software-as-a-service model. Spencer's departure also marks the end of an era for the original Xbox leadership team.

The details

Phil Spencer has been with Microsoft for over 38 years, joining the company in 1988. He has led the Xbox division since 2014, helping to transform the brand after the troubled launch of the Xbox One. In his retirement announcement, Spencer reflected on the "incredible journey" he's been on at Microsoft. Microsoft CEO Satya Nadella praised Spencer's work in "transforming what we do and how we do it" in the gaming business. Asha Sharma, who previously held roles at Meta and Instacart, will now take over as the new Xbox CEO. In her own email to staff, Sharma committed to continuing the Xbox legacy and improving upon it, while also emphasizing the need to make gaming feel "seamless" across devices beyond just consoles.

  • Phil Spencer announced his retirement on February 20, 2026.
  • Asha Sharma will take over as the new Xbox CEO, effective immediately.

The players

Phil Spencer

The long-time head of Xbox who is retiring after 38 years at Microsoft.

Asha Sharma

The current President of Microsoft's CoreAI product who will be replacing Phil Spencer as the new Xbox CEO.

Satya Nadella

The CEO of Microsoft who praised Phil Spencer's contributions in transforming the Xbox division.

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What they’re saying

“Over 38 years at Microsoft, including 12 years leading Gaming, Phil helped transform what we do and how we do it.”

— Satya Nadella, CEO, Microsoft (Internal email)

“Gaming now lives across devices, not within the limits of any single piece of hardware. As we expand across PC, mobile, and cloud, Xbox should feel seamless, instant, and worthy of the communities we serve. We will break down barriers so developers can build once and reach players everywhere without compromise.”

— Asha Sharma, Incoming CEO, Xbox (Internal email)

What’s next

The transition to the new Xbox leadership under Asha Sharma will be closely watched by the gaming community as Microsoft looks to chart a new course for the Xbox brand beyond traditional consoles.

The takeaway

This executive shakeup at Xbox marks the end of an era under Phil Spencer's leadership, but also signals Microsoft's intent to evolve the Xbox business model to better compete in an increasingly device-agnostic gaming landscape dominated by cloud and mobile platforms.