Microsoft Gaming Welcomes Asha Sharma as New CEO, Phil Spencer Retires

After a 38-year tenure, Phil Spencer is retiring from Microsoft, marking a significant shift in leadership for the tech giant’s gaming division. Asha Sharma, formerly of Instacart and Meta, will succeed him as Executive Vice President and CEO of Microsoft Gaming, effective immediately. The transition comes as Microsoft navigates challenges within the Xbox business, including a recent decline in revenue.

A New Era for Microsoft Gaming

The announcement, made on February 20, 2026, follows a period of succession planning initiated last year, according to Microsoft CEO Satya Nadella [Microsoft Blog]. Nadella expressed gratitude for Spencer’s “extraordinary leadership and partnership” and highlighted Sharma’s experience in scaling services that reach billions of users.

Asha Sharma’s Background and Vision

Sharma joined Microsoft in 2024, bringing with her a strong track record from her previous roles as Chief Operating Officer at Instacart and a Vice President at Meta [Microsoft Blog]. Her expertise in platform building, business model alignment, and global operations will be crucial as Microsoft Gaming moves forward.

Xbox Business Faces Challenges

The leadership change occurs amidst a period of difficulty for the Xbox business. Revenue in the December quarter declined nearly 10%, a steeper drop than anticipated [CNBC]. Microsoft also announced an unspecified impairment charge in its gaming business in January. Despite the $75 billion acquisition of Activision Blizzard in 2023, current-generation Xbox consoles have not achieved the same popularity as competitors like Sony’s PlayStation and Nintendo’s Switch [CNBC].

Matt Booty’s Role

Alongside Sharma’s appointment, Matt Booty will assume the role of Executive Vice President and Chief Content Officer, reporting to Sharma [Microsoft Blog]. Booty has overseen the growth of Microsoft Gaming’s portfolio of nearly 40 studios, including Xbox, Bethesda, Activision Blizzard, and King, responsible for franchises like Halo, Call of Duty, and Candy Crush.

Recent Leadership Departures

Spencer’s departure follows other recent leadership changes at Microsoft, including the exits of business development chief Chris Young and GitHub CEO Thomas Dohmke in 2025. Charlie Bell, formerly Microsoft’s top security leader, transitioned to an individual contributor role earlier this month [CNBC].

Key Takeaways

• Phil Spencer has retired from Microsoft after 38 years.
• Asha Sharma is the new CEO of Microsoft Gaming, bringing experience from Instacart and Meta.
• The Xbox business experienced a nearly 10% revenue decline in the December quarter.
• Matt Booty will serve as Chief Content Officer under Sharma’s leadership.