And so it’s all change at Xbox. Last Friday it was announced that the CEO of Microsoft’s gaming division, Phil Spencer, is to retire, while its president Sarah Bond is resigning. In their place, a new partnership: Xbox Game Studios head Matt Booty is promoted to chief content officer, while the new CEO is Asha Sharma, who moves from her post as president of Microsoft’s CoreAI product.
In a company-wide email, Spencer stated that he would stay on until the summer in an advisory role before, “starting the next chapter of my life”. For her part, Bond issued a statement on her LinkedIn account: “I’ve decided this is the right time for me to take my next step, both personally and professionally.” It was all extremely good natured, but its doubtful these airy missives tell the full tale.
For 25 years, Xbox has been a monolithic presence in the games industry. It continually challenged PlayStation as the most popular, technologically advanced console, it revolutionalised online gaming, and it brought us multimillion-selling titles such as Halo, Gears of War and Forza Horizon. And for most of that time, Spencer has been the machine’s figurehead.
In charge of Xbox since 2014, Spencer inherited the PR disaster that was the Xbox One announcement. From here, he embraced new innovations such as cloud gaming and subscriptions, turning Xbox into a multi-platform app and ushering in Game Pass, giving owners access to new and legacy games for one monthly fee. He also oversaw a period of massive development expansion, buying ZeniMax Media for $7.5bn in 2020 and then Activision Blizzard for an astonishing $69bn in 2023, thereby securing Call of Duty, World of Warcraft and Candy Crush for the empire.
But it’s also been a period of job cuts across Microsoft’s gaming division, as well as waves of studio closures and game cancellations. Tango Gameworks, The Initiative and Arkane Austin were shuttered, and the Perfect Dark remake was cancelled, as was Rare’s intriguing eco adventure Everwild.
“Spencer leaves Microsoft with Xbox in something of a quandary,” says games analyst George E Osborn, whose book Power Play: Video Games, Politics and the Battle for Global Influence is out in June. “Its hardware sales have dropped considerably in recent years, but the dream of delivering a cross-platform game subscription service to rise up in its place hasn’t been delivered. He leaves the business with Xbox in a confusing position, simultaneously establishing it as one of the top three video game publishers in the world by revenue but lacking clarity about where it goes next.”
There is concern about Sharma’s redeployment from the AI division – is she there to cut costs further by green-lighting more studio redundancies in favour of gen AI? In her letter to staff, she assured them “we will not chase short-term efficiency or flood our ecosystem with soulless AI slop […] I want to return to the…
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