Sunset of an Era: Asha Sharma Named Microsoft Gaming CEO as Phil Spencer Retires
The long-running leadership chapter at Microsoft Gaming closed this week as Phil Spencer announced his retirement and Asha Sharma, head of product development for Microsoft CoreAI, took the helm. The change matters now because the move comes amid a stretched Activision Blizzard acquisition, internal realignments and an early, leaked announcement that exposed fractures in Xbox communications.
Asha Sharma: new CEO and priorities
Microsoft Gaming confirmed that Asha Sharma, who led product development for Microsoft CoreAI, has been named CEO, and she has outlined three top commitments in an internal memo: "great games, " "the return of Xbox" and the "future of play. " Sharma, whose career includes senior roles at Instacart and Meta, told reporters she believes great games must deliver "deep emotional resonance" and a "distinct point of view, " citing the way Campo Santo’s 2016 game Firewatch makes players "feel something. " She described herself as an outsider to the gaming community who has "a lot to learn, " said she is "coming into gaming as a platform builder, " and emphasized a goal of earning the trust of players and developers through consistency over time.
Phil Spencer’s retirement and the lead-up
Phil Spencer, the long-term leader of Microsoft Gaming, announced his decision to step down after what has been described internally as a difficult period for Xbox. Spencer decided to resign last year, following an extended process to acquire Activision Blizzard that dragged on far longer than Microsoft had anticipated. That prolonged acquisition, combined with pressure to grow the business, led Microsoft to shift away from Xbox-exclusive titles toward a multiplatform strategy and to attempt a reinvention of the Xbox brand beyond the console, a strategy characterized as having mixed results.
Sarah Bond’s exit and October 2023 promotion
The leadership shuffle also included the departure of Xbox president Sarah Bond, a move that surprised many who had seen Bond as Spencer’s natural successor. Bond had been promoted to Xbox president in October 2023, just days after Microsoft finalized its $68. 7 billion acquisition of Activision Blizzard. Bond played a key role in shepherding that deal through regulatory hurdles and had increasingly become the public face of Xbox while Spencer focused on integrating the new business into Microsoft Gaming.
Internal fallout: memos, a LinkedIn post and a leak
The announcement was moved up when the story began to leak, and an impending piece from a major outlet accelerated the public release, producing a day of internal confusion. Teams inside Xbox first heard the news through reporters rather than internal channels. Microsoft executives shared four memos with Xbox teams on Friday; only Phil Spencer’s memo mentioned Sarah Bond. Satya Nadella, Microsoft CFO Amy Hood, Microsoft Gaming EVP Matt Booty and new CEO Asha Sharma each offered comments praising Spencer but did not mention Bond. Bond’s own memo to her teams did not appear until hours later and was not posted on Microsoft’s official blog.
Compounding the misstep, Bond’s social team left a LinkedIn post inviting feedback about Xbox accessibility features live just before her departure was announced; that post remained visible for hours until Bond’s team eventually circulated her memo internally. More than a dozen current and former Microsoft employees say the decision to elevate Sharma and the exclusion of Bond from early acknowledgments had been anticipated within the company for months.
People departures, backward compatibility and the company timeline
Six months after Bond’s October 2023 promotion, Xbox executive Kareem Choudhry—who reported directly to Bond—left Microsoft, triggering further team reorganizations. Choudhry had been a key figure in Xbox’s backward compatibility efforts. The succession change had been under careful planning for months; the announcement had been intended for a later date but was released early because the news leaked.
AI stance and upcoming milestones
Sharma’s AI background has already shaped expectations. She told interviewers she has "no tolerance for bad AI, " noting that "AI has long been part of gaming and will continue to be, " while stressing that "great stories are created by humans. " She referenced Matthew Ball’s State of Video Gaming in 2026 as context for the sector’s transformation and framed Microsoft Gaming’s next phase around new growth engines. Spencer’s exit arrives as Microsoft Gaming approaches its 25th anniversary this fall—an occasion Sharma called a chance to "honor the past while setting direction for the next chapter. " That next chapter includes planned updates at the GDC Festival of Gaming next March and larger announcements ahead of Xbox’s next Games Showcase this spring.
The sunset of Spencer’s era and the rapid elevation of Sharma crystallize a company at a strategic inflection point: prolonged dealmaking and a shift to multiplatform releases contributed to leadership turnover, the leak-driven early announcement exposed internal communication weaknesses, and the new CEO’s AI-first background signals a deliberate reorientation toward technologies and storytelling that she believes will define the future of play.
