Microsoft gaming head Phil Spencer retires, insider Asha Sharma takes over.

Microsoft said longtime gaming chief Phil Spencer will retire after a 38-year career at the company, handing leadership of its gaming business to executive Asha Sharma.

Spencer, who has led Microsoft’s gaming organization for 12 years, will remain in an advisory role through the summer to support the transition, the company said.

Microsoft appointed Sharma executive vice president and chief executive officer of Microsoft Gaming, reporting to Chief Executive Satya Nadella. Sharma most recently led product development for AI models and services at Microsoft and previously held leadership roles at Instacart and Meta, according to company statements.

In her first message to employees, Sharma said she intends to renew focus on the Xbox console and “recommit to our core Xbox fans and players,” while supporting creators and partners across Microsoft’s gaming ecosystem.

Matt Booty was promoted to executive vice president and chief content officer. Booty, previously responsible for game content and studios, will oversee Microsoft’s portfolio of game teams across Xbox, Bethesda, Activision Blizzard, and King, and will report to Sharma.

Microsoft also said Sarah Bond, president and chief operating officer of Xbox, is leaving the company to begin a new chapter while assisting with the handover in the near term.

The reshuffle comes as Microsoft’s gaming unit faces tariff-related cost pressures, shifting consumer spending, and competition with Sony’s PlayStation. Microsoft has raised prices on some Xbox hardware, and the company reported gaming revenue fell about 9.5% in the December quarter. Microsoft’s $69 billion acquisition of Activision Blizzard, completed in 2023 after lengthy regulatory review, significantly expanded its games business.

Source: Company statements and Reuters reporting.