Multiple outlets are currently reporting that Microsoft Gaming CEO Phil Spencer is retiring from Microsoft. Additionally, president Sarah Bond is resigning from the company. Executive Asha Sharma is apparently set to replace Spencer. Sharma is currently the President of Microsoft CoreAI.
Xbox Game Studios head Matt Booty has reportedly been promoted to chief content officer.
The news has apparently filtered out through an email sent to Microsoft employees containing letters from Spencer, Sharma, and CEO Satya Nadella, which has been obtained by news outlets. There was no message from Bond.
The email was posted in full on Bluesky by Wario64.
According to the letters, Spencer informed Nadella of his intention to step down in late 2025. Nadella thanked Spencer for his hard work at the company, but made no mention of Bond or her departure.
Spencer praised Bond in his exit note, saying she was “instrumental” during a “defining” period of Xbox history.Â
Sharma informed employees that her “first job” involves making three commitments to “great games,” “the return of Xbox,” and “the future of play.”
Her description of that commitment comes with mention of “AI slop,” a derogatory term for AI-generated content. “To meet the moment, we will invent new business models and new ways to play by leaning into what we already have: iconic teams, characters, and worlds that people love.”Â
“But we will not treat those worlds as static IP to milk and monetize. We will build a shared platform and tools that empower developers and players to create and share their own stories.”
“As monetization and AI evolve and influence this future, we will not chase short-term efficiency or flood our ecosystem with soulless AI slop. Games are and always will be art, crafted by humans, and created with the most innovative technology provided by us.”
Update 2/20: Spencer has confirmed his exit from Microsoft in posts on social media. “It’s rare in life to know when a chapter is closing, but after 38 years at Microsoft, that moment has arrived for me. I’ve made the decision to retire and begin the next chapter of my life,” he wrote, adding that he’s “excited” for Sharma to step into his former position. “Watching her lean in with curiosity and a real desire to strengthen the foundation we’ve built gives me confidence that our Xbox communities will be well supported in the years ahead.”
“Thinking back to my start as an intern in 1988, I never could have imagined the path ahead. I’ve been lucky to work with so many passionate creators, partners, colleagues, and players across the industry; people who challenged me, taught me, and made this work full of joy and wonder. Thank you to everyone who’s been part of this chapter. This community has meant more to me than I can say.”
Game Developer has reached out to Microsoft for comment and will update this story when the company responds.
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