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Spencer to remain as adviser through summer

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Asha Sharma named CEO of gaming division

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Matt Booty promoted to chief content officer

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Xbox COO Sarah Bond exits Microsoft ( MSFT )

(Adds background in paragraph 2, analyst comment in paragraph

14)

By Jaspreet ​Singh

Feb 20 (Reuters) - Microsoft ( MSFT ) said on Friday

gaming head ‌Phil Spencer is retiring after 38 years at the

software maker, in a major leadership shake-up.

The company ⁠named insider Asha Sharma as the executive vice

president and CEO of the ⁠gaming division. In her previous role,

Sharma led product development ‌for AI models ‌and services at

Microsoft ( MSFT ).

Sharma said she would renew focus on the Xbox console,

aiming to "recommit to our core ​Xbox fans and players."

Microsoft Gaming has ‌been grappling with tariff-induced cost

pressures, strong competition and uncertain consumer spending,

prompting price rises on Xbox hardware.

Last month, Microsoft ( MSFT ) reported that ​its gaming revenue fell

around 9.5% in ​the fourth ‌quarter, and it recorded undisclosed

impairment charges in the division.

Microsoft ( MSFT ) had closed its $69 billion deal for "Call of Duty"

maker Activision Blizzard in 2023, swelling ⁠its heft in the

video-gaming market after heavy regulatory scrutiny.

The company's gaming ⁠unit contends with robust competition

from Sony's PlayStation, particularly regarding console market

share and exclusive game offerings.

Spencer said he would remain in an advisory role through the

summer to ensure a smooth handover.

"Last year, Phil Spencer made the decision ⁠to ‌retire from

the company, and since then we've been talking ‌about succession

planning," Nadella said.

The company also said Sarah Bond, president and chief

operating officer ⁠at Xbox, is leaving the company "to begin a

new chapter."

Matt Booty has taken over the role of executive vice

president and chief content officer at the gaming division, the

company said.

Booty was previously president of game content and studios

at Microsoft ( MSFT ), according to his LinkedIn page.

Microsoft ( MSFT ) said Booty would report to Sharma, who previously

worked at Meta and ​online grocery delivery firm

Instacart.

"The timing signals Microsoft ( MSFT ) is moving Xbox from a

reinvention phase into an execution phase ... The priority now

is operational cadence and a predictable ​release pipeline," said

PP Foresight analyst ‌Paolo Pescatore.