Microsoft Gaming CEO Phil Spencer is retiring, and with him, Xbox president Sarah Bond will also exit the company, marking a significant leadership shakeup at the tech giant. Asha Sharma, previously president of product development for Microsoft’s CoreAI division, will succeed Spencer as the new chief and executive vice president of Microsoft Gaming, effective immediately.
The announcement, made February 20, 2026, has prompted a wave of reaction, including concerns from one of the Xbox’s original creators. Seamus Blackley, who co-created the Xbox console in 2001, believes Microsoft’s plan is to ultimately discontinue the Xbox business. Blackley voiced his concerns in an interview with GamesBeat, suggesting that the appointment of Sharma, who lacks a traditional gaming background and comes from Microsoft’s AI team, signals a strategic shift away from gaming.
“They don’t say that, but that’s what’s happening,” Blackley stated. He described Sharma’s potential role as a “palliative care doctor who slides Xbox gently into the night.” Blackley’s assessment stems from his belief that Microsoft CEO Satya Nadella views artificial intelligence as a technology that will “subsume” games, rendering the traditional video games business obsolete.
According to Blackley, the broader objective within Microsoft is to integrate all business units into the company’s AI-focused future. “The job of all these people is to just gently usher all of these business units into the new world of AI,” he said. He added that appointing someone with a passion for games would be “in direct conflict with everything else Microsoft is doing.”
Microsoft currently owns nearly 40 development studios, including Activision, Bethesda, Blizzard, King, Mojang, and Xbox Game Studios, responsible for major franchises such as “Call of Duty,” “Candy Crush,” “Diablo,” “The Elder Scrolls,” “Fallout,” “Halo,” “Minecraft,” and “World of Warcraft.”
Despite Blackley’s concerns, Sharma has publicly committed to revitalizing Xbox. She has promised to deliver “the return of Xbox” and to re-engage with core Xbox fans, even explicitly stating a commitment to the console platform. Nadella has also expressed his continued support for gaming, stating he is “long on gaming and its role at the center of our consumer ambition.”
The future direction of planned game releases and potential new hardware, such as a rumored Xbox handheld, remains unclear. Microsoft has a slate of games scheduled for release this year, including titles in the “Fable,” “Halo,” and “Call of Duty” franchises. The question remains whether Sharma will maintain the existing roadmap or pursue a different strategy.
Sharma has indicated she will prioritize quality and innovation, stating she has “no tolerance for bad AI” and will avoid “soulless AI slop.” However, the extent to which Microsoft’s overall AI push will influence Xbox’s development remains to be seen.
