Phil Spencer retires as Microsoft Gaming chief; Asha Sharma steps in

Microsoft Gaming Leadership Shake-Up and Business Outlook

By Jaspreet Singh

Feb 20 (Reuters) - Microsoft said on Friday gaming head Phil Spencer is retiring after 38 years at the software maker, in a major leadership shake-up.

Asha Sharma Appointed CEO of Microsoft Gaming

The company named insider Asha Sharma as the executive vice president and CEO of the gaming division. In her previous role, Sharma led product development for AI models and services at Microsoft.

Xbox Strategy Under Sharma

Sharma said she would renew focus on the Xbox console, aiming to "recommit to our core Xbox fans and players."

Operating Pressures and Pricing Moves

Microsoft Gaming has been grappling with tariff-induced cost pressures, strong competition and uncertain consumer spending, prompting price rises on Xbox hardware.

Revenue Drop and Impairment Charges

Last month, Microsoft reported that its gaming revenue fell around 9.5% in the December quarter, and it recorded undisclosed impairment charges in the division.

Activision Blizzard Acquisition Context

Microsoft had closed its $69 billion deal for "Call of Duty" maker Activision Blizzard in 2023, swelling its heft in the video-gaming market after heavy regulatory scrutiny.

Competitive Landscape vs. PlayStation

The company's gaming unit contends with robust competition from Sony's PlayStation, particularly regarding console market share and exclusive game offerings.

Phil Spencer’s Transition to Advisory Role

Spencer said he would remain in an advisory role through the summer to ensure a smooth handover.

Succession Planning Remarks from Leadership

"Last year, Phil Spencer made the decision to retire from the company, and since then we've been talking about succession planning," Microsoft CEO Satya Nadella said.

Other Executive Moves: Departures and Promotions

The company also said Sarah Bond, president and chief operating officer at Xbox, is leaving the company "to begin a new chapter."

Matt Booty Named EVP and Chief Content Officer

Matt Booty has taken over the role of executive vice president and chief content officer at the gaming division, the company said.

Booty’s Previous Role and Experience

Booty was previously president of game content and studios at Microsoft, according to his LinkedIn page.

Reporting Structure Under Sharma

The company said Booty would report to Sharma, who previously worked at Meta and online grocery delivery firm Instacart.

"Microsoft's leadership transition is appropriate as it comes at a time when the technology underlying gaming is shifting. As AI becomes a bigger element in game development, Microsoft needs a new generation of leaders to manage through this transition," said D.A. Davidson analyst Gil Luria.

Reporting and Editing Credits

(Reporting by Jaspreet Singh in Bengaluru; Editing by Maju Samuel and Alan Barona)