Phil Spencer retires as Microsoft reshapes Xbox leadership
Saturday, February 21, 2026 at 9:47AM Microsoft announced a major change in its gaming division on Friday as Phil Spencer revealed he is retiring after a 38-year career at the company. Spencer’s departure comes at a turbulent time for the brand, with Xbox hardware sales reportedly down 32% in the most recent quarter, and overall gaming revenue falling 9%.
The leadership shakeup is compounded by the unexpected resignation of Xbox President Sarah Bond, who was once considered Spencer's natural successor.
Taking the helm as the new chief executive officer of Microsoft Gaming is Asha Sharma, a former executive at Meta and Instacart who most recently led Microsoft’s Core AI team. As part of the new structure, long-time studios head Matt Booty has been promoted to executive vice president and chief content officer, reporting directly to Sharma.
Spencer and Bond will remain as special advisors through the summer to ensure a smooth transition.
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