Xbox followers had been anticipating the retirement of Microsoft Gaming CEO Phil Spencer for years, however what most hadn’t anticipated was the departure of Xbox president Sarah Bond too. For many outdoors the corporate, Bond appeared like Spencer’s pure successor, a deputy of types.
Microsoft CEO Satya Nadella and Microsoft CFO Amy Hood clearly didn’t agree.
Instead of choosing Bond for the function, Microsoft promoted Asha Sharma, a former Microsoft AI govt, to the highest of Xbox. The determination to miss Bond may need stunned many Xbox followers, however for the greater than a dozen present and former Microsoft workers I’ve been talking to, it’s felt inevitable in latest months.
Phil Spencer, Microsoft’s long-term Xbox chief, made the choice to resign from Microsoft final 12 months after a troublesome few years for Xbox. The big Activision Blizzard acquisition had dragged on for a lot longer than Microsoft had anticipated, and the necessity to develop the enterprise noticed Microsoft stroll away from Xbox-exclusive video games in favor of a multiplatform technique. Microsoft has additionally been making an attempt to reinvent the Xbox model past the console, with blended outcomes.
Spencer’s determination led to months of cautious successor planning. It was introduced to the world on Friday, however it was presupposed to be right this moment. Microsoft was pressured to announce early as a result of it began to leak and IGN was planning to run a narrative, based on sources conversant in the state of affairs.
That kicked off a day of chaos, the place groups inside Xbox had been listening to the information first by reporters and information retailers, as an alternative of by way of inside memos. The workforce working Sarah Bond’s social media accounts was so unprepared {that a} LinkedIn post inviting folks to supply suggestions about Xbox accessibility options went reside simply earlier than her departure was introduced. It sat there for hours, till Bond’s workforce ultimately posted her own memo.
Microsoft executives shared 4 memos with Xbox groups on Friday, however solely Phil Spencer talked about Bond. Satya Nadella, Microsoft Gaming EVP Matt Booty, and new Microsoft Gaming CEO Asha Sharma all had type phrases for Spencer, however no point out of Bond. Even Bond’s personal memo to her groups didn’t arrive till hours after the announcement and wasn’t a part of Microsoft’s weblog.
Some Xbox workers I’ve been talking with noticed the writing on the wall for Bond final 12 months. She was promoted to Xbox president in October 2023, simply days after Microsoft finalized its $68.7 billion deal to amass Activision Blizzard. Bond had been essential in getting the deal over the road with regulators and slowly began to change into the face of Xbox as Spencer took on the difficult duties of integrating an enormous new enterprise into Microsoft Gaming.
Six months after Bond’s promotion, Xbox govt Kareem Choudhry, who reported on to Bond, departed Microsoft and triggered one other shake-up of some groups inside Xbox. Choudhry was key to Xbox’s backward compatibility help and helped convey Xbox Cloud Gaming to life as xCloud in 2019.
Just weeks after Choudhry departed, former Xbox chief advertising officer Jerret West additionally left Microsoft in June 2024. That meant the Xbox advertising workforce was now reporting on to Bond. A month later, Microsoft delivered a marketing campaign that signalled folks didn’t want to purchase an Xbox console anymore. The message was that “you don’t need an Xbox to play Xbox,” as a result of video games had been obtainable by Xbox Cloud Gaming on TVs.
This was all a part of the “Xbox everywhere” technique that Bond had been pursuing, a imaginative and prescient to maneuver the Xbox model past its roots in console {hardware}. Months later the “This is an Xbox” campaign launched, with commercials that positioned a cellphone or a pill as an Xbox as an alternative of only a console. It was a complicated marketing campaign, and I’m advised it offended many Xbox workers internally.
“This is an Xbox” additionally debuted months after Bond appeared on stage on the Bloomberg Technology Summit and announced an Xbox mobile gaming store that was presupposed to launch in July 2024. It nonetheless doesn’t exist virtually two years later. Although makes an attempt to redefine Xbox had been clearly tied to the cell retailer efforts, Microsoft nonetheless went forward with “This is an Xbox” after the store was delayed.
The pivot away from console, led by Bond, underneath Spencer’s route, hasn’t gone nicely for Xbox. Microsoft’s Xbox {hardware} income has declined for 3 monetary years in a row, and it appears like these declining revenues are going to proceed all through fiscal 2026.
Most of the present and former Xbox workers I’ve spoken to in latest days are relieved that Bond is leaving Microsoft. I’ve heard from a number of sources that Bond has been robust to work with, and constructed a workforce construction that meant if you happen to didn’t observe the imaginative and prescient or questioned it, you had been out. Most have praised her skill to strike partnerships with firms and builders, although.
I wrote in December 2024 that Bond had “staked her career reputation on the idea of Xbox being everywhere, across multiple platforms and devices.” This additionally concerned fastidiously managing her picture each internally and externally, making her seem like a gamer like Phil Spencer. In actuality, she wasn’t.
I perceive that Bond’s technique had been failing internally and been questioned a number of instances. Bond had tried to push cell and cloud over console, to achieve doubtlessly hundreds of thousands extra Xbox clients, however the end result has been a traditional case of chasing tomorrow’s clients by neglecting right this moment’s.
Phil Spencer’s retirement has appeared inevitable to Xbox workers, significantly over the previous 12 months. In February final 12 months, Spencer took an extended trip, and I’m advised some groups needed to wait weeks for sign-off on some key modifications. Shortly after this trip, rumors began circulating inside Microsoft that Spencer was on the brink of retire. Microsoft was ultimately forced to deny the rumors in July, claiming Spencer wouldn’t be retiring “anytime soon.”
With Spencer’s retirement official, Microsoft is hitting the reset button on Bond’s Xbox technique as an alternative of embracing it additional. Microsoft Gaming CEO Asha Sharma is now promising “the return of Xbox,” in a transparent message to workers that the technique over the previous few years has not been working. “I want to return to the renegade spirit that built Xbox in the first place,” says Sharma.
Xbox workers I’ve been talking to have been involved concerning the Sharma appointment, significantly due to her earlier function as an AI govt at Microsoft. There can also be concern about her lack of trade expertise in leisure and gaming. Sharma has been clear she’s not a gamer and has spent the weekend responding to folks on X and even taking recreation suggestions.
Some Xbox workers fear she’ll drive AI into all the pieces Xbox does, however Sharma was clearly prepared for that response. “As monetization and AI evolve and influence this future, we will not chase short-term efficiency or flood our ecosystem with soulless AI slop,” stated Sharma in her memo. “Games are and always will be art, crafted by humans, and created with the most innovative technology provided by us.”
The different concern is that she’s been appointed by Nadella as some form of executioner of the Xbox console. Her memo doesn’t counsel that, and Microsoft may have simply appointed Matt Booty into that form of function to push recreation publishing as an alternative of the Xbox console. I get the impression from sources that Microsoft needs a turnaround and is nervous about dropping Xbox, because it’s one in every of its solely remaining profitable shopper manufacturers.
Those who know Sharma higher describe her as enthusiastic, keen to be taught, and really able to getting groups to execute on a transparent imaginative and prescient moderately than coming in as a product executioner. She additionally has a historical past at Instacart and Meta of overseeing platform launches and getting folks to make use of merchandise, the kind of person acquisition that Xbox has failed at in recent times.
Sharma’s non-gaming credentials don’t imply she will’t do a great job at Xbox, however it can nonetheless be a troublesome gig to step into the footwear of Phil Spencer, who’s broadly revered inside and outdoors of Microsoft. He will probably be remembered for the affect he had in turning Xbox round greater than a decade in the past. Xbox may have simply died after the Xbox One catastrophe, however Spencer made transformative selections which have benefited the complete gaming trade.
Xbox led the way in which in consumer-friendly selections like crossplay, or permitting shoppers to purchase a recreation as soon as and play it throughout each PC and console. Under Spencer’s watch, Game Pass has additionally pressured opponents to supply related subscription companies.
Spencer can also be departing at a time when the Xbox Series S / X technology has did not put a dent in Sony’s PlayStation gross sales and through a interval of turmoil within the recreation trade and inside Xbox. Layoffs and studio closures have plagued the Xbox division after the Activision Blizzard acquisition, and there are big questions on Microsoft’s gaming acquisitions, the negative effects of its Game Pass push, and the way forward for the Xbox console itself. Spencer gained’t be right here to reply them anymore.
Sharma now has the chance to outline the following 25 years of Xbox, and we’re about to search out out if she will flip Xbox round and execute on a clearer technique. “The next 25 years belong to the teams who dare to build something surprising, something no one else is willing to try, and have the patience to see it through,” says Sharma. “We have done this before, and I am here to help us do it again.”
