Microsoft Gaming CEO Phil Spencer appears at the political opening of the Gamescom conference in Cologne, Germany on August 23, 2023.
Franziska Krug | German Select | Getty Images
microsoft’s Games chief Phil Spencer is leaving the software maker after 38 years as the company faces further challenges with its Xbox business.
“Phil Spencer made the decision to leave the company last year and we have been discussing succession planning since then,” Microsoft CEO Satya Nadella said in a memo to employees released Friday. “I would like to thank Phil for his exceptional leadership and partnership.”
Revenue from video games fell about 10% year over year in the December quarter, a sharper decline than the company expected, but total revenue rose nearly 17%. In January, Microsoft announced an unspecified impairment charge in its gaming business.
The company made a $75 billion bet on expanding its gaming business with the acquisition of Activision Blizzard in 2023, releasing Call of Duty titles as cloud services. However, the current generation Xbox consoles are not that popular. sony’s PlayStation, Nintendo Switch, and Microsoft have all shut down studios developing new games.
Mr. Nadella said in the memo that Mr. Spencer, who took over as head of Xbox in 2014 after running the company’s game studio, nearly tripled Microsoft’s games business through acquisitions such as Activision Blizzard. Spencer also urged Microsoft to acquire Minecraft developer Mojang.
“Phil spent more than 38 years at Microsoft, including 12 years leading our gaming division, helping transform what we do and how we do it,” Nadella wrote.
Asha Sharma joined Microsoft in 2024 instacartwill succeed Spencer as CEO of the gaming division and report to Nadella. She previously served as President of Products for Microsoft’s core AI business. meta Executive Jay Parikh is running. Before joining Instacart in 2021 to serve as executive director, Sharma spent four years as vice president of product and engineering at Meta and two years in marketing at Microsoft.
“We recommit to our core Xbox fans and players, to those who have invested in us over the past 25 years, and to our developers who build vast universes and experiences that are embraced by players around the world,” Sharma wrote in a message to Microsoft gaming employees.
She has worked on artificial intelligence products such as Foundry for incorporating AI models into third-party applications.
“As monetization and AI evolve and impact this future, we have no intention of chasing short-term efficiencies or flooding the ecosystem with soulless AI slop,” Sharma wrote. “Games are and always will be art, made by humans and created using the most innovative technology we have to offer.”
Matt Booty, head of Microsoft’s game studios, will report to Sharma as executive vice president and chief content officer.
“Together, Asha and Matt bring the right combination of consumer product leadership and gaming depth to advance our platform’s innovation and content pipeline,” Nadella wrote.
Sarah Bond, president and executive officer of the Xbox division, is leaving Microsoft, Nadella said.
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