Players concerned that Xbox may pivot to more AI as Phil Spencer retires

It’s safe to say Xbox isn’t doing well right now. With dwindling sales and desperate price hikes, the console wars could be coming to an end soon. Amid the decline of Xbox, Microsoft Gaming CEO Phil Spencer has announced his retirement.

“It’s rare in life to know when a chapter is closing, but after 38 years at Microsoft, that moment has arrived for me,” Spencer tweeted on February 20th. “I’ve made the decision to retire and begin the next chapter of my life. It’s a milestone that’s given me a chance to reflect on the incredible journey I’ve been fortunate enough to share with so many of you.”

Spencer started working as an intern at Microsoft back in 1988, initially developing early CD-ROM games. In 1994, he moved to the Desktop Finance Division as a manager for Microsoft Money. He pivoted to a product unit manager role in Consumer Productivity in 1999. He worked as General Manager of Microsoft Game Studios EMEA for a while before he became the general manager of Microsoft Studios worldwide in 2008. A year later, he was Corporate Vice President.

In recent years, he led Xbox through multiple console launches, acquired a bunch of game studios, created the business model behind the Xbox Game Pass, and then Xbox Cloud Gaming,

He tweeted of his journey: “Thinking back to my start as an intern in 1988, I never could have imagined the path ahead. I’ve been lucky to work with so many passionate creators, partners, colleagues, and players across the industry; people who challenged me, taught me, and made this work full of joy and wonder.”

This is gaming we’re talking about, however, so you can definitely expect to see very mixed reactions on social media. While gamers acknowledged all of the work he’s done, many felt his console launches were failures and blamed him for studio closures and increased prices. One angry gamer even said: “I wish you left sooner.”

While Spencer is not winning any medals in my book, I think it’s about to get even worse.

New Microsoft CEO wants to keep up with “rapid change” but not use “AI slop”

Spencer’s position as Microsoft Gaming CEO is being filled by Asha Sharma. She joined Microsoft in 2024 and was the President of CoreAI before taking the CEO position. Before that, she was Chief Operating Officer at Instacart and Vice President of Product and Engineering at Meta.

Said Spencer: “She’s joining an incredible group of people; teams full of talent, heart, and a deep commitment to the players they serve. Watching her lean in with curiosity and a real desire to strengthen the foundation we’ve built gives me confidence that our Xbox communities will be well supported in the years ahead.”

In a letter, strangely shared by Geoff Keighley (is he being paid by Microsoft now, too?), Sharma said she felt “humility and urgency” after taking her new role as CEO: “Humility because this team has built something extraordinary over decades. Urgency because gaming is in a period of rapid change, and we need to move with clarity and conviction.”

Of course, gaming skeptics took this to mean she was implementing much more AI as the technology becomes more prominent in the industry. It’s not a far-fetched accusation after learning of Sharma’s history with AI. It’s not like Xbox has never used AI before.

She did, however, say she was focused on making great games and bringing Xbox back to its core. She said she wants to take risks and encourage “bold ideas” from studios, all with the intention of giving players “what they care about.”

This was followed by saying she wants to “reinvent” play, another statement that had gamers suspicious. She wrote: “To meet the moment, we will invent new business models and new ways to play by leaning into what we already have: iconic teams, characters, and worlds that people love. But we will not treat those worlds as static IP to milk and monetize. We will build a shared platform and tools that empower developers and players to create and share their own stories.  

“As monetization and AI evolve and influence this future, we will not chase short-term efficiency or flood our ecosystem with soulless AI slop. Games are and always will be art, crafted by humans, and created with the most innovative technology provided by us.”

It’s strange that someone who works in AI would call it “slop,” but I take this to mean that they will use AI, just not in a lazy, unappealing way. I think some gamers would be even more critical than that.

It’s much too early to truly know how Sharma plans to lead Microsoft going forward. It’s going to be tough for her to turn around what Spencer has already done for the past few decades, and he may have left her with some pretty tough challenges. Can AI solve some of these issues? Will she truly avoid “AI slop?” Only time will tell.

But I think Xbox would be screwed either way.