Microsoft, the tech titan known as much for its productivity software as its gaming ambitions, has announced a seismic shift at the top of its gaming division. On February 20, 2026, the company revealed that Asha Sharma, an executive with deep roots in artificial intelligence and consumer platforms, will take the helm as Executive Vice President and CEO of Microsoft Gaming. Sharma steps into the role as Phil Spencer, the respected leader who steered Xbox through a transformative era, retires after an impressive 38-year tenure at the company—including 12 years leading its gaming business.
Spencer’s departure marks the end of an era. According to a memo from Microsoft CEO Satya Nadella, published on February 20, Spencer “helped transform what we do and how we do it.” Under Spencer’s stewardship, Microsoft’s gaming business nearly tripled in size, fueled by bold acquisitions like Activision Blizzard, ZeniMax, and Mojang—the studio behind the global phenomenon Minecraft. His vision expanded Microsoft’s reach across PC, mobile, and cloud gaming, and he strengthened the company’s culture across its nearly 40 studios, which now include heavyweights like Bethesda, Activision Blizzard, and King.
“Over 38 years at Microsoft, including 12 years leading Gaming, Phil helped transform what we do and how we do it,” Nadella wrote, expressing gratitude for Spencer’s extraordinary leadership and partnership. Spencer will remain in an advisory role through the summer of 2026 to ensure a smooth transition, working closely with Sharma as she steps into her new role.
Sharma, who joined Microsoft in 2024 from Instacart and previously held executive positions at Meta, brings a unique blend of AI expertise and consumer product leadership to the table. Her previous roles included Chief Operating Officer at Instacart and Vice President at Meta, where she helped build services that reached billions of users. Most recently, she served as president of product in Microsoft’s Core AI business, working on projects like the Foundry, which integrates AI models into third-party applications.
In a message to Microsoft Gaming employees, Sharma conveyed both humility and urgency as she begins her tenure. “Humility because this team has built something extraordinary over decades. Urgency because gaming is in a period of rapid change, and we need to move with clarity and conviction,” she wrote. Sharma emphasized three main commitments: delivering great games, recommitting to Xbox console fans, and shaping the future of play with innovative business models and a thoughtful approach to AI.
“Everything begins here. We must have great games beloved by players before we do anything. Unforgettable characters, stories that make us feel, innovative gameplay, and creative excellence,” Sharma stated. She pledged to empower studios, invest in iconic franchises, and back bold new ideas, even if it means taking risks or entering new markets. The message was clear: Microsoft Gaming will not rest on its laurels or treat its franchises as mere cash cows. “We will not treat those worlds as static IP to milk and monetize. We will build a shared platform and tools that empower developers and players to create and share their own stories.”
Sharma’s arrival comes at a critical moment for Microsoft’s gaming ambitions. Despite reaching over 500 million monthly active users and amassing a formidable portfolio of studios, the company’s gaming revenue declined about 10% year-over-year in the December quarter, even as total company revenue grew nearly 17%. The $75 billion acquisition of Activision Blizzard in 2023 was a headline-grabbing bet, but current generation Xbox consoles have struggled to match the popularity of rivals like Sony’s PlayStation and Nintendo’s Switch. Microsoft has also shuttered some studios working on new games, signaling the competitive and unpredictable nature of the industry.
Recognizing these challenges, Sharma has made it clear that Xbox will return to its roots. “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,” she wrote. The renewed focus on console gaming comes after years of expanding into mobile and PC, and Sharma’s vision is to make Xbox “seamless, instant, and worthy of the communities we serve.”
As part of the leadership shakeup, Matt Booty, a veteran of Microsoft’s gaming studios, has been promoted to Executive Vice President and Chief Content Officer, reporting directly to Sharma. Booty’s experience spans decades in the industry, and under his leadership, Microsoft Gaming’s studio portfolio has flourished. “Our first conversations centered on her commitment to making great games and the role that plays in our overall success,” Booty said of Sharma. He emphasized there are no organizational changes underway for the studios, signaling stability amid the transition.
Not everyone will stay for the next chapter. Sarah Bond, the president and operating chief of the Xbox unit, has decided to leave Microsoft as part of the transition. Bond played a pivotal role in shaping Xbox’s platform strategy, expanding Game Pass and cloud gaming, and guiding new hardware launches. Spencer, in his farewell message, called Bond “instrumental during a defining period for Xbox.”
Spencer himself reflected on his journey with heartfelt gratitude. “When I walked through Microsoft’s doors as an intern in June of 1988, I could never have imagined the products I’d help build, the players and customers we’d serve, or the extraordinary teams I’d be lucky enough to join. It’s been an epic ride and truly the privilege of a lifetime.” He expressed confidence in Sharma and Booty, stating, “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.”
Sharma’s approach to technology is particularly noteworthy in an age where artificial intelligence is reshaping entertainment. “As monetization and AI evolve and influence this future, we will not chase short-term efficiency or flood our ecosystem with soulless AI slop,” she declared. “Games are and always will be art, crafted by humans, and created with the most innovative technology provided by us.”
With Sharma at the helm, Microsoft Gaming is poised for a new era. The company’s ambitions remain sky-high, but the strategy is shifting: a renewed devotion to console fans, a promise to foster creativity and risk-taking, and a commitment to balancing AI innovation with the soul of human artistry. Whether this new leadership can recapture the renegade spirit that first made Xbox a household name remains to be seen, but one thing is certain—Microsoft is betting big on its gaming future, and the world will be watching.