Top Xbox Leaders Phil Spencer And Sarah Bond Exit Microsoft In Shakeup

Microsoft's Xbox division is getting a major management overhaul that begins with the departure of Phil Spencer, the long-time face of Xbox who said he is stepping down to embark on "the next chapter of my life." Likewise, Xbox President Sarah Bond is also leaving Microsoft to begin a new chapter. Their departures (one of which was rumored since last July) leave massive holes to be filled, which Microsoft has already done.

Stepping in Spencer's shoes as Executive Vice President and CEO of Microsoft Gaming is Asha Sharma. She brings a fresh set of eyeballs to Xbox, after having previously served as Chief Operating Office at Instacart and a stint as Vice President at Meta.

"Asha has helped build and scale services that reach billions of people and support thriving consumer and developer ecosystems. She brings deep experience building and growing platforms, aligning business models to long-term value, and operating at global scale, which will be critical in leading our gaming business into its next era of growth," said Satya Nadella, CEO of Microsoft.

Asha Sharma and Matt Booty (Credit: Microsoft)

Sharma will report directly to Nadella. Meanwhile, Matt Booty has been named Executive Vice President and Chief Content Officer, and will report to Sharma. Booty previously served as President of Game Content and Studios at Microsoft.

"Matt’s career reflects a lifelong commitment to games and to the people who make them. Under his leadership, Microsoft Gaming has grown to span nearly 40 studios across Xbox, Bethesda, Activision Blizzard, and King, which are home to beloved franchises including Halo, The Elder Scrolls, Call of Duty, World of Warcraft, Diablo, Candy Crush, and Fallout," Satya added.

In a long blog post announcing the change in leadership, both Spencer and Natya said the succession plan has been in place since last fall. It was at that time when Spencer shared with Satya that he was thinking about stepping back.

"From that moment, we aligned on approaching this transition with intention, ensuring stability, and strengthening the foundation we’ve built. Xbox has always been more than a business. It's a vibrant community of players, creators, and teams who care deeply about what we build and how we build it. And it deserves a thoughtful, deliberate plan for the road ahead," Spencer said.

So at least outwardly, this is a decision Spencer made on his own, as opposed to being asked to resign. Only those closest to Spencer and Satya know if there is more to the story. It's no secret that Xbox has struggled in comparison to PlayStation, and a shakeup in management is an opportunity to reboot Xbox.

Asha Sharma (Credit: Microsoft)

The immediate challenge for Sharma is to reinvigorate Xbox and prove that this change in leadership is not a sign that the ship is sinking. A quick glance around the web and on social media reveals plenty of skepticism and knee-jerk reactions saying Xbox is dead. However, don't go digging Xbox's grave just yet.

From Satya's perspective, Sharma and Booty bring the "right combination of product leadership and gaming depth to push our platform innovation and content pipeline forward." They bring different strengths and perspectives to Xbox, and it will be interesting to see how it plays out in the months and potentially years ahead.

One of the concerns we're seeing on social media is that Sharma does not have a gaming background. There is some fear that this transition will result in AI slop. Sharma addressed those concerns head-on, however, saying the re-invigoration of Xbox entails three commitments.

Today I begin my role as CEO of @Xbox.
Here are my three commitments:
1/ GREAT games
2/ Return of @Xbox
3/ Future of playhttps://t.co/6UNrpFm1Ki

— Asha (@asha_shar) February 20, 2026

The first is to make "great games." That may seem obvious, but gamers should be happy to hear that she has gone on record saying she plans to "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."

Her second stated commitment is "the return of Xbox." Sharma notes a renewed commitment to both developers and fans of Xbox, and that it starts with the console. Reading between the lines, Sharma appears to be saying that future console plans remain intact. That said, it doesn't sound like the 'This is Xbox' mantra is going way.

"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," Sharma added.

The last stated commitment is to the "future of play." This one is a little more vague as Sharma talks about inventing new business models and finding new ways to play while leaning into Microsoft's existing teams, characters, and worlds. However, she reassures gamers that the Xbox division "will not treat those worlds as static IP to milk and monetize."

Her message is certainly ambitious and she's saying a lot of good things. Now we wait to see if Sharma and the Xbox division can deliver now that the management transition is underway.