Earthquake in Xbox. Phil Spencer is leaving, the head of AI is taking over.

Calendar 2/23/2026

At Microsoft, one of the biggest personnel changes in the history of the gaming division has taken place. Phil Spencer is retiring after 38 years of work, and along with him, Sarah Bond is leaving the company. The decisions announced by the management of the corporation have sparked a wave of speculation about the future of Xbox, especially since the new leader is someone strongly connected to the development of artificial intelligence.

The End of Spencer's Era

Phil Spencer started working at Microsoft in the late 1980s, and since 2001, he has been associated solely with the Xbox brand. In 2014, he took the helm at a difficult time following the launch of the Xbox One and was responsible for rebuilding the platform's image. Under his leadership, the Xbox Series X and Series S were created, Xbox Game Pass experienced dynamic growth, and Microsoft acquired companies like Bethesda and Activision Blizzard. Since 2022, Spencer has served as the CEO of the gaming division and reported directly to Satya Nadella. His departure coincided with the resignation of Sarah Bond, who was seen as a natural successor.

AI at the Center of the Strategy

The new head of Xbox is Asha Sharma, who previously led the Core AI department. This move clearly shows that Microsoft wants to strengthen the link between game development and artificial intelligence technologies. Sharma assured that Xbox will not be flooded with soulless productions generated by algorithms, and the creativity of creators will remain key. At the same time, she announced a more intensive use of AI tools in the production process. Meanwhile, Matt Booty has been promoted to Chief Content Officer. According to announcements, there are currently no plans for further organizational changes or layoffs.

What's next for the Xbox brand?

The console market is undergoing a transformation. The traditional model of exclusivity is losing significance, and cross-platform gaming and portable devices, such as Steam Deck or ROG Ally, are playing an increasingly important role. Microsoft has been working for years to bridge the worlds of PC and consoles, and the new management structure could accelerate this process. The question is whether shifting the decision-making power to the AI department will prove to be a step towards innovation or will introduce uncertainty among players attached to the previous vision of Xbox.

The departure of Phil Spencer closes an important chapter in Xbox history. New management with experience in AI may change the way games are created and distributed, but the true effects of this change will only become clear in the coming years.

Source: Microsoft, Windows Central

Katarzyna Petru Avatar
Katarzyna Petru

Journalist, reviewer, and columnist for the "ChooseTV" portal