Highlights
- Asha Sharma, a non-gaming executive from Microsoft's AI division, replaces retiring Phil Spencer as Microsoft Gaming CEO.
- Xbox President Sarah Bond has resigned; Matt Booty promoted to chief content officer.
- Sharma inherits declining Xbox revenue but a strong 2026 game lineup.
Asha Sharma, the president of Microsoft's CoreAI division, has been named chief executive of Microsoft Gaming, replacing Phil Spencer, who is retiring after 38 years at the company.
Sharma's appointment caught much of the gaming industry off guard. She has no experience in game development or publishing. She joined Microsoft in 2024 from Instacart, where she was chief operating officer, and before that spent four years as vice president of product and engineering at Meta, overseeing private communications products across Facebook, Messenger, and Instagram. At Microsoft, she led product development for the company's AI platform, working on tools like Azure AI and the infrastructure behind its partnership with OpenAI.
Her selection over internal candidates with deep gaming backgrounds, most notably Xbox President Sarah Bond, who has resigned, signals that Microsoft sees the next chapter of its gaming business as a problem of platform scale and distribution rather than content alone.
"I am long on gaming and its role at the center of our consumer ambition," Nadella wrote in a memo to staff announcing the change. He said Sharma's experience building and scaling platforms at global scale "will be critical in leading our gaming business into its next era of growth."
Xbox Revenue Drops 9% as Sharma Inherits Slowing Hardware Sales and a Stacked 2026 Lineup
Sharma takes over at a difficult moment. Xbox gaming revenue fell 9% year-over-year in Microsoft's most recent quarter, with hardware revenue dropping 32% due to declining console sales. Microsoft has cut thousands of gaming jobs over the past two years. The company has also begun releasing games on PlayStation and Nintendo platforms, a strategy that has broadened Xbox's reach but divided its most loyal players.
At the same time, the software pipeline heading into 2026 is among the strongest Xbox has ever assembled. Forza Horizon 6, Fable, Gears of War: E-Day, and Halo: Campaign Evolved, an Unreal Engine 5 remake of the original Halo: Combat Evolved that will mark the franchise's first release on PlayStation, are all expected this year.
Microsoft
In her first email to the Microsoft Gaming team, Sharma said her initial priority was to "understand what makes this work and protect it." She laid out three commitments: great games, a renewed focus on the Xbox console, and expanding how and where people play. She also moved to address the most immediate concern about her background, the possibility that her AI experience would push Xbox toward generative shortcuts in game development.
Spencer, in his farewell email, said he had "tremendous confidence" in Sharma. "She brings genuine curiosity, clarity and a deep commitment to understanding players, creators, and the decisions that shape our future," he wrote.
Whether Sharma can hold together an audience that cares deeply about gaming tradition while pushing Xbox into new territory on mobile, cloud, and multi-platform distribution is the question that now defines Microsoft's consumer gaming business. Spencer built the library. His successor has to figure out how to get it into everyone's hands.
