An artificial intelligence executive now leads Microsoft's gaming division following Phil Spencer's retirement announcement this week. Asha Sharma, previously president of Microsoft's CoreAI product group, assumes control immediately as gamers question whether AI will dominate future Xbox development.
Spencer confirmed his departure on February 20 after 38 years with Microsoft, including the last 12 overseeing Xbox operations. The transition accelerates what was reportedly planned for late 2025 or early 2027 following a new console release, familiar with internal discussions.
Microsoft's gaming business faces mounting challenges that likely influenced the timing. Hardware revenue dropped 32% earlier this year while overall gaming division income fell 9%, creating pressure for strategic changes at the leadership level.
Sharma brings extensive AI credentials but no traditional gaming experience to her new position. Before joining Microsoft in 2024, she served as chief operating officer at grocery delivery service Instacart and held vice president roles at Meta focused on platform development.
Her appointment coincides with rising subscription costs that have drawn criticism from players. Game Pass Ultimate now costs $30 monthly compared to Nintendo's $50 annual premium service and PlayStation Plus Premium at $17.99 per month.
"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 emphasized that games "are and always will be art, crafted by humans."
Gaming communities expressed immediate skepticism across social platforms following the announcement. Multiple Reddit threads questioned whether an AI-focused executive could understand player priorities or maintain Spencer's emphasis on cross-platform accessibility.
Sarah Bond's simultaneous resignation removes another experienced gaming leader from Microsoft's executive team. Bond had been widely considered Spencer's logical successor before her departure was confirmed alongside the CEO change.
Spencer leaves behind substantial accomplishments during his tenure including Game Pass launch in 2017, backward compatibility programs starting in 2015, cloud gaming expansion, and major studio acquisitions like Bethesda and Activision Blizzard.
Microsoft CEO Satya Nadella confirmed Spencer will provide advisory support through summer 2026 to ensure continuity during the transition period. Matt Booty receives promotion to Executive Vice President and Chief Content Officer reporting directly to Sharma.
The leadership shift occurs as Xbox confronts competitive pressure beyond subscription pricing. Hardware sales trail significantly behind rival platforms despite recent price adjustments for both consoles and services.
Sharma outlined three primary commitments in her initial public statement: delivering compelling game experiences, strengthening connections with core Xbox supporters through console focus, and shaping interactive entertainment's future without relying on what she termed "soulless AI slop."
She noted that modern gaming "lives across devices" rather than being confined to specific hardware platforms, suggesting continued support for cross-platform initiatives established under Spencer's leadership.
