Microsoft has appointed artificial-intelligence executive Asha Sharma as the new head of its gaming division, placing her in charge of the Xbox business and signaling a strategic reset for the company’s gaming future.

Sharma replaces long-time Xbox leader Phil Spencer, who is retiring after more than a decade steering the brand. Spencer had overseen Xbox since 2014 and was elevated to gaming CEO in 2022. At the same time, Xbox President Sarah Bond will depart, while studio head Matt Booty becomes chief content officer reporting directly to Sharma.

The leadership reshuffle represents one of the biggest transitions in Xbox history and suggests a shift in priorities — particularly toward console players after years of expansion into PC and mobile gaming.

Microsoft Signals Return to Console Gaming Roots

In a message to employees, Sharma said the company plans to reconnect with long-time Xbox fans and developers who helped build the platform over the past 25 years.

Microsoft had recently pushed aggressively beyond consoles, targeting mobile and PC gamers and investing heavily in acquisitions such as Activision Blizzard. While the strategy broadened reach, it also frustrated loyal console players who felt the brand’s identity was being diluted.

Sharma indicated the company will rebalance its focus.

She said Xbox would “celebrate its roots” with renewed attention on the console ecosystem — a notable pivot after several years emphasizing cross-platform access.

Layoffs, Studio Closures and Fan Backlash

The change in leadership comes after a turbulent period for Microsoft’s gaming division. Since 2024, the company has laid off more than 3,000 gaming employees and shut down studios including Arkane Austin, The Initiative and Tango Gameworks. Several in-development titles were also canceled.

Fans were further upset when Microsoft released major Xbox titles on rival platforms owned by Sony and Nintendo — a move many saw as weakening the exclusivity that once defined Xbox.

Meanwhile, the anticipated growth in mobile gaming did not materialize as expected, and the division struggled to gain strong footing in that space.

Why Microsoft Chose an AI Executive

According to Microsoft CEO Satya Nadella, Sharma’s appointment reflects the increasing importance of artificial intelligence in gaming’s future.

Before this role, Sharma led initiatives integrating multiple AI models, agents and developer tools across Microsoft’s ecosystem. She previously held leadership positions at Instacart and Meta, building consumer-focused products.

Her background suggests Xbox will evolve beyond hardware — blending gaming, AI services and software experiences more deeply.

Her High-Pressure AI Moment

Earlier in 2025, when the tech industry reacted to the sudden popularity of DeepSeek models, Sharma led roughly 100 engineers in an urgent effort to test and deploy a compatible version for Microsoft’s Azure customers within days.

The rapid response reportedly impressed leadership and demonstrated her ability to execute under intense pressure — a likely factor in her promotion.

What This Means for Xbox Players

Sharma’s leadership suggests three likely shifts:

First, stronger emphasis on console experiences.
Second, deeper integration of AI in games and developer tools.
Third, rebuilding trust with long-time Xbox fans.

The company appears to be moving from “play anywhere” toward “play best on Xbox.”

10 Things to Know About Asha Sharma

1. She is Microsoft’s new head of gaming and leader of Xbox.

2. She replaces longtime Xbox boss Phil Spencer.

3. She previously worked at Instacart and Meta.

4. She specializes in artificial intelligence and consumer platforms.

5. She led Microsoft’s response to the surge in interest around DeepSeek AI models.

6. She coordinated a rapid Azure deployment with about 100 engineers.

7. She is expected to refocus Microsoft on console gamers.

8. She will oversee content strategy alongside Matt Booty.

9. Her appointment signals deeper AI integration into gaming.

10. She represents a generational leadership shift for Xbox after more than a decade under Spencer.

FAQ

Why did Microsoft replace Phil Spencer?

He is retiring after leading Xbox since 2014.

What is Asha Sharma’s background?

She is an AI and consumer technology executive with previous roles at Meta and Instacart.

Will Xbox stop releasing games on other platforms?

Not confirmed, but Microsoft says it will refocus on console players.

How will AI affect Xbox?

Expect smarter gameplay systems, developer tools and platform features.