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It marks the end of an era at Xbox.

Phil Spencer is officially retiring on February 23, 2026, closing a 38-year chapter with Microsoft including more than a decade leading Microsoft Gaming.

During his tenure, Spencer oversaw the launch and global expansion of Xbox Game Pass, major acquisitions such as Activision Blizzard, and a massive growth phase that reportedly brought Xbox’s ecosystem to hundreds of millions of monthly active users.

Stepping into the role is Asha Sharma, previously part of Microsoft’s CoreAI division.

Her appointment has sparked immediate discussion across the gaming community especially given her AI background.

However, in early remarks following the announcement, Sharma emphasized that Microsoft Gaming will not prioritize automation over artistry. She stated that games are fundamentally human-crafted experiences and that the company has no intention of flooding the ecosystem with low-effort AI-driven content.

The leadership shakeup also includes the departure of Xbox President Sarah Bond and the promotion of Matt Booty to Chief Content Officer, signaling broader structural changes within Microsoft Gaming.

What this transition ultimately means for console strategy, Game Pass direction, and future exclusives remains to be seen but 2026 is shaping up to be a defining year for Xbox.