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Phil Spencer Retirement and Xbox Leadership Changes Explained

Phil Spencer and Sarah Bond are leaving Xbox. Microsoft Gaming announces Asha Sharma as the new CEO and a big promotion for Matt Booty.

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Phil Spencer is retiring from his position as Microsoft Gaming CEO and a major leadership shakeup is underway for Xbox.

Phil Spencer and Sarah Bond Are Leaving Xbox

A surprise scoop from IGN on Friday afternoon revealed a major leadership change on the way at Microsoft’s gaming and Xbox divisions. After 38 years at Microsoft and 12 years of leading Gaming, Phil Spencer is ready to start the next chapter of his life and take a step away from Microsoft.

Spencer’s right-hand and the person who many thought was the heir apparent at Xbox, Sarah Bond, is also stepping away from Microsoft as part of this leadership shakeup.

How all the key players at Microsoft gaming and Xbox are impacted by spencer’s retirement

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

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…

Spencer is no longer the lead for Gaming at Microsoft starting Monday, February 23. He shared the news in a lengthy message to his team.

“Thinking back to my start as an intern in 1988, I never could have imagined the path ahead. I’ve been lucky to work with so many passionate creators, partners, colleagues, and players across the industry; people who challenged me, taught me, and made this work full of joy and wonder.”

Bond is retiring from the role of Xbox President. Spencer announced Bond’s departure towards the end of his own statement:

“”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. I’m grateful for her partnership and the impact she’s had, and I wish her the very best in what comes next.”

Today I begin my role as CEO of @Xbox. Here are my three commitments:1/ GREAT games2/ Return of @Xbox 3/ Future of playhttps://t.co/6UNrpFm1Ki— Asha (@asha_shar) February 20, 2026

Today I begin my role as CEO of @Xbox. Here are my three commitments:1/ GREAT games2/ Return of @Xbox 3/ Future of playhttps://t.co/6UNrpFm1Ki

Sharma is the new big boss at Microsoft Gaming. Sharma joined Microsoft from Instacart (and previously Meta/Facebook). Up until this transition, she had been President of Microsoft’s CoreAI product.

Spencer’s announcement revealed Sharma would be taking the helm and explained they have been working together over the past several months to prepare for the transition:

“Today marks an exciting new chapter for Microsoft Gaming as Asha Sharma steps into the role of CEO, and I want to be the first to welcome her to this incredible team. Working with her over the past several months has given me tremendous confidence. She brings genuine curiosity, clarity and a deep commitment to understanding players, creators, and the decisions that shape our future. We know this is an important moment for our fans, partners, and team, and we’re committed to getting it right. I’ll remain in an advisory role through the summer to support a smooth handoff.”

Xbox Game Studios head Matt Booty is being promoted to Chief Content Officer. In the new structure, it looks like Sharma and Booty will work closely together, in the same way that Spencer and Bond have in recent years.

Sharma explained that she promoted Booty as part of her commitment to making great games. “… 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. I promoted Matt Booty in honor of this commitment. He understands the craft and the challenges of building great games, has led teams that deliver award-winning work, and has earned the trust of game developers across the industry.”

This shakeup comes at a pivotal time for Xbox as the next generation of consoles looms in the not too distant future. Hardware prices have been rising and there have been rumors that Microsoft and Xbox could be shifting away from gaming hardware to focus exclusively on game development and Game Pass subscriptions. It will be very interesting to see how things change with Sharma in charge and what the next few years look like for Microsoft Gaming.

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