Microsoft just handed the Xbox keys to an AI exec. The internet is already freaking out

Fast Company Tech

by Chris Morris

February 23, 2026

AI-Generated Deep Dive Summary

Microsoft has announced a significant leadership change within its Xbox division, with Phil Spencer retiring after nearly 12 years in the role. His departure comes just months after Microsoft assured stakeholders that he would remain at the helm. Asha Sharma, currently president of CoreAI, will take over as the new head of Xbox, marking a notable shift in the gaming landscape. This move follows a period of declining profitability and influence for Xbox, with hardware revenue dropping 32% year-over-year in the latest quarter and overall gaming revenue falling by 9%. Sarah Bond, Spencer's long-time heir apparent, was bypassed for the role and has also left the company. Sharma's appointment is significant as she will be the first woman to lead a major console manufacturer, despite facing criticism online for her lack of deep gaming industry experience. The transition could signal a strategic pivot for Xbox, potentially refocusing on consoles and exclusive titles after recent efforts to expand Game Pass across platforms. However, challenges remain, including inventory issues with the Series X/S consoles, high costs due to component shortages, and the need to adapt Game Pass's business model to sustain profitability in an era of expensive AAA game development. For readers interested in design, this shift underscores the evolving strategies within gaming tech companies. Sharma's leadership may reignite innovation in console design and exclusive content creation, which has been somewhat sidelined in recent years. Additionally, her background in AI could bring fresh perspectives to Xbox's future direction, potentially blending cutting-edge technology with traditional gaming experiences. This change highlights broader trends in the gaming industry, where female leadership is increasingly making an impact despite lingering gatekeeping issues. Sharma's success or challenges will be closely watched as she navigates a complex landscape of declining sales and shifting consumer preferences. Her ability to

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Originally published on Fast Company Tech on 2/23/2026