Microsoft confirmed Friday that Phil Spencer, who has led its gaming efforts for many years, is retiring after 38 years with the company. The firm appointed Asha Sharma, an insider, as executive vice president and CEO of Microsoft Gaming. Sharma will report directly to Microsoft Chairman and CEO Satya Nadella.
In a statement outlining her priorities, Sharma said she intends to renew emphasis on the Xbox console and to "recommit to our core Xbox fans and players." The company has said the gaming business is navigating multiple headwinds, including tariff-induced increases in costs, intense rivalry across the console and content landscape, and uncertain consumer spending patterns. Those pressures have contributed to price increases for Xbox hardware.
Last month Microsoft reported that gaming revenue fell by about 9.5% in the fourth quarter and that the division recorded undisclosed impairment charges during the period. The unit's footprint in the video-game market grew substantially after Microsoft closed its $69 billion acquisition of Activision Blizzard in 2023, a deal that followed intensive regulatory scrutiny.
Microsoft's gaming division continues to face strong competition from Sony's PlayStation, particularly around console market share and the securing of exclusive game titles. The company said Spencer will remain on in an advisory role through the summer to help ensure an orderly handover.
Satya Nadella commented on the succession process, saying, "Last year, Phil Spencer made the decision to retire from the company, and since then we’ve been talking about succession planning." The company also announced that Sarah Bond, who served as president and chief operating officer at Xbox, is leaving the company "to begin a new chapter."
Microsoft said Matt Booty has been named executive vice president and chief content officer for the gaming division. Booty was previously president of game content and studios at Microsoft, according to his LinkedIn page. The company indicated that Booty will report to Sharma. The announcement also notes that Sharma has prior experience at Meta and at the online grocery delivery company Instacart.
The company release included a separate note on investing tools, asking, "Should you be buying MSFT right now?" and describing ProPicks AI, which it said evaluates MSFT alongside thousands of other companies every month using more than 100 financial metrics. The description stated the AI identifies stock ideas by assessing fundamentals, momentum, and valuation, and it cited past winners including Super Micro Computer (+185%) and AppLovin (+157%).
Context for markets and stakeholders
- Leadership changes at a major tech and gaming company can influence investor sentiment in tech and entertainment sectors.
- Operational and cost pressures in hardware supply chains affect consumer electronics and retail segments tied to gaming consoles and peripherals.