[STEAM] Phil Spencer retiring as head of Xbox, to be replaced by one of Microsoft’s AI presidents: ‘We know this is an important moment’

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Phil Spencer is exiting Xbox as chief executive after spending 25 years at Xbox and over a decade at the helm. Hewill be replaced by the president of

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's CoreAI division, Asha Sharma, who joined the company in 2024.

This major shakeup was

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by anonymous sources, as the information hasn't yet been cleared for the public. Spencer's retirement from Xbox's top position is going into effect on Feb. 23, next Monday. However, he is to remain in an advisory role to the new Xbox chief, Asha Sharma, until at least the summer so as to assure a "smooth handoff."

Sharma is to be named as CEO of

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Gaming, while Xbox Game Studios chief Matt Booty will be promoted to CCO, a position from which he will closely cooperate with Sharma.

Spencer said in an internal email that he had been considering retirement for a while now, communicating the idea to

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chief executive Satya Nadella. "From that moment, we aligned on approaching this transition with intention, ensuring stability, and strengthening the foundation we’ve built," he wrote.

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Spencer has been with

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since 1988 and has been the head of Xbox since 2014. Screengrab by Destructoid via

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He is firm in his belief that Sharma is the right choice to lead the company following his departure.

"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," he said.

He added that he'll advise Sharma during this transitory ******* until the summer.

Sharma also wrote an internal email to

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staff, promising to reassess what makes Xbox tick, what works, and what does not, emphasizing "great games" as a core tenet. She does have a lot of experience in high leadership positions, with backgrounds at Meta, where she was the VP of Product and Engineering, as well as Intercart, where she held a COO position.

"My first job is simple: understand what makes this work and protect it. That starts with three commitments. 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," she said.

"Second, the return of Xbox. We will recommit to our core Xbox fans and players, those who have invested with us for the past 25 years, and to the developers who build the expansive universes and experiences that are embraced by players across the world. We will celebrate our roots with a renewed commitment to Xbox starting with console which has shaped who we are. It connects us to the players and fans who invest in Xbox, and to the developers who build ambitious experiences for it," Sharma added.

Finally, Sharma concluded that Xbox will not approach the future of gaming and its franchises as "static IP to milk and monetize," but rather focus on "build[ing] a shared platform and tools that empower developers and players to create and share their own stories."

"As monetization and AI evolve and influence this future, we will not chase short-term efficiency or flood our ecosystem with soulless AI slop. Games are and always will be art, crafted by humans, and created with the most innovative technology provided by us."

Those are some strong words and encouraging ideas, if clashing with Sharma's background as

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's AI executive.

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