Phil Spencer, the leader of Microsoft's gaming division, is on the verge of wrapping up his illustrious 38-year tenure at Microsoft. Presently, the Microsoft Xbox business is grappling with challenges, evidenced by a roughly 10% year-over-year decline in gaming revenue during the December quarter of the previous year, along with impairment losses disclosed in January of this year. Despite the acquisition of Activision Blizzard in 2023, Xbox console sales continue to trail behind those of its competitors. Furthermore, Microsoft has made the difficult decision to close down several new game development studios.
Since assuming the helm of Xbox in 2014, Spencer has adeptly expanded the scope of Microsoft's gaming operations. Asha Sharma, who joined Microsoft in 2024, is set to take over as the CEO of the gaming business. She has pledged to refocus efforts on the core Xbox fan base, players, and developers, while steering clear of inundating the gaming ecosystem with AI-generated content lacking in soul. Matt Booty, the head of Microsoft Game Studios, will now report directly to Sharma. Additionally, Sarah Bond, the president and chief operating officer of the Xbox division, is also departing from the company.