Microsoft Gaming CEO Phil Spencer retires after 38 years, Xbox boss Sarah Bond also quits
Phil Spencer, best known as the CEO of Microsoft’s gaming division, is retiring. First revealed by IGN before later being confirmed by Spencer and Microsoft themselves, Spencer’s retirement comes after 38 years at Microsoft, 12 of them as the head of Microsoft Gaming.
In an internal memo sent to staff Microsoft CEO Satya Nadella announced Spencer’s departure, thanking him for his leadership and partnership across his over 38 years at Microsoft. Spencer later replied to that email, claiming that he had approched Satya about stepping back last fall. Spencer would also go on to publicly announce his retirement on Twitter:
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. It’s a milestone that’s given me a chance to reflect on the incredible journey I’ve been…
— Phil Spencer (@XboxP3) February 20, 2026
Perhaps more surprising than Spencer’s retirement though was news that Xbox President Sarah Bond is also leaving. Bond was widely expected to takeover Spencer’s role if and when he retired, but instead has resigned. The new Microsoft Gaming CEO will instead be Asha Sharma, who is currently the head of Microsoft’s CoreAI. Xbox Game Studios chief Matt Booty will also be promoted to Chief Content Officer and will be working in close partnership with Sharma.
While Spencer was widely known to be a gamer at heart, Sharma on the other hand is a career corporate worker, having previous spent time has COO at Instacart as well as once serving as VP of Product and Engineering at Meta. Despite having no gaming experience and instead coming from an AI background, her opening email to Microsoft staff called for them to return to making great games, take risks, reconnecting to core Xbox fans and a commitment to not chase short term goals with AI slop.
Spencer’s time at Microsoft Gaming will likely be best known for his aggresive moves to take over a number of big name gaming studios, most notably the USD69 billion acquisition of Activision-Blizzard-King in 2022. He also led the move to takeover ZeniMax, parent company of Bethesda, back in 2020, which gave Microsoft ownership of franchises such as Fallout, Elder Scrolls and Doom. Before that, there was also the makeover of Minecraft studio Mojang back in 2014. His passion for video games made him popular among gamers, even if Microsoft’s own hardware never managed to catch up to the PlayStation.
As for new Microsoft Gaming head Asha Sharma, it remains to be seen how much a non-gamer with an AI background can change things up at Xbox, though her first step to promote Matt Booty is at least a sign that she’s willing to let gamers lead development of games at Microsoft.
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