Phil Spencer Leaves Microsoft After 38 Years Amid Xbox Challenges
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy MSFT?
Source: CNBC
- Leadership Change: Phil Spencer, head of Microsoft Gaming, is leaving after 38 years, having nearly tripled the gaming business since taking over Xbox in 2014, yet the company faces increasing challenges as Xbox revenue dropped about 10% in the December quarter amid stiff competition.
- Revenue Decline: While Microsoft’s total revenue grew nearly 17%, its gaming division reported an unspecified impairment charge in 2023, indicating struggles against competitors like Sony's PlayStation and Nintendo's Switch, leading to the closure of several game studios.
- Succession Plan: Asha Sharma will succeed Spencer as CEO of gaming, having joined Microsoft in 2024 from Instacart; Nadella noted that her partnership with Matt Booty will drive platform innovation and content pipeline, reaffirming commitment to core Xbox fans.
- Future Strategy: Sharma emphasized that games will always be art, rejecting short-term efficiency pursuits, and committed to integrating AI with gaming to ensure unique and innovative experiences that meet player expectations.
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Analyst Views on MSFT
Wall Street analysts forecast MSFT stock price to rise
34 Analyst Rating
32 Buy
2 Hold
0 Sell
Strong Buy
Current: 398.460
Low
500.00
Averages
631.36
High
678.00
Current: 398.460
Low
500.00
Averages
631.36
High
678.00
About MSFT
Microsoft Corporation is a technology company that develops and supports software, services, devices, and solutions. Its Productivity and Business Processes segment consists of products and services in its portfolio of productivity, communication, and information services, spanning a variety of devices and platforms. It comprises Microsoft 365 Commercial products and cloud services; Microsoft 365 Consumer products and cloud services; LinkedIn, and Dynamics products and cloud services. The Intelligent Cloud segment consists of its public, private, and hybrid server products and cloud services. It comprises server products and cloud services, including Azure, and enterprise and partner services, including Enterprise Support Services. Its More Personal Computing segment primarily comprises Windows and Devices, including Windows OEM licensing; Gaming, including Xbox hardware and Xbox content; Search and news advertising, comprising Bing and Copilot, Microsoft News, and Microsoft Edge.
About the author

Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.

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- Leadership Change: Phil Spencer, head of Microsoft's gaming division, retires after 38 years, with Asha Sharma, who joined from Instacart in 2024, set to take over, potentially bringing a fresh strategic vision.
- Revenue Decline: Xbox revenue fell nearly 10% in the December quarter, exceeding management's expectations, despite total revenue growing nearly 17%, indicating increasing challenges within the gaming sector.
- Acquisitions and Investments: Microsoft made a $75 billion bet by acquiring Activision Blizzard in 2023; however, current generation Xbox consoles have not matched the popularity of Sony's PlayStation or Nintendo's Switch, leading to the closure of several game development studios.
- Future Commitment: Asha Sharma pledges to focus on core Xbox fans and developers, emphasizing the artistry and human touch in gaming, while planning to explore AI and content innovation to adapt to market changes.
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- Leadership Change: Phil Spencer, head of Microsoft Gaming, is leaving after 38 years, having nearly tripled the gaming business since taking over Xbox in 2014, yet the company faces increasing challenges as Xbox revenue dropped about 10% in the December quarter amid stiff competition.
- Revenue Decline: While Microsoft’s total revenue grew nearly 17%, its gaming division reported an unspecified impairment charge in 2023, indicating struggles against competitors like Sony's PlayStation and Nintendo's Switch, leading to the closure of several game studios.
- Succession Plan: Asha Sharma will succeed Spencer as CEO of gaming, having joined Microsoft in 2024 from Instacart; Nadella noted that her partnership with Matt Booty will drive platform innovation and content pipeline, reaffirming commitment to core Xbox fans.
- Future Strategy: Sharma emphasized that games will always be art, rejecting short-term efficiency pursuits, and committed to integrating AI with gaming to ensure unique and innovative experiences that meet player expectations.
See More









