The head of Microsoft Gaming resigns, and his successor says he will "return to Xbox."

The head of Microsoft Gaming resigns, and his successor says he will “return to Xbox.” – Phil Spencer’s replacement, Asha Sharma, pledged the “return of Xbox,” but she did not specify when any new hardware may be available.

Phil Spencer, the CEO of Microsoft Gaming, has left after leading the company’s Xbox division and gaming initiatives for 12 years. During his more than 38 years with the company, Spencer oversaw transactions such as Activision Blizzard’s $68.7 billion acquisition of Call of Duty and Overwatch publisher.

Asha Sharma, who currently oversees Microsoft’s CoreAI division and has had prominent positions at Meta and Instacart, is expected to take Spencer’s place.

Sharma pledged the “return of Xbox” in her introduction, although she did not specify when any new hardware would be available. Gaming “now lives across devices, not within the limits of any single piece of hardware,” according to Sharma, who also declared a renewed dedication to multi-platform gaming.

“We’ll remove obstacles so developers can create once and reach players everywhere without compromising.”

There were other significant changes in Microsoft’s gaming administration besides Spencer’s exit. Matt Booty, the head of Xbox Studios, was elevated to Executive Vice President and Chief Content Officer, while Xbox President Sarah Bond also departed.

“No organizational changes are underway” at Xbox Studios, according to Booty, and his “focus is on supporting the teams and leaders” that are already in place.

The announcement coincides with what may be one of the most difficult times in Xbox’s recent history. Mat Piscatella, a senior director at market research firm Circana, tells IGN that sales of Xbox Series consoles decreased by 70% year over year during the 2025 holiday season. While sales of the recently announced Nintendo Switch 2 combined with Switch 1 were down 10% from sales of Switch 1 alone last year, the PS5 had a 40% year-over-year decline.

Microsoft’s gaming sector has also had large layoffs in recent years; under Spencer’s leadership, 650 positions across teams were eliminated in November 2024.