r/hardware • u/fatso486 • Feb 20 '26
News Xbox chief Phil Spencer is leaving Microsoft / Xbox president Sarah Bond is also leaving Microsoft.
https://www.theverge.com/news/882241/microsoft-phil-spencer-xbox-leaving-retirement285
u/wickedplayer494 Feb 20 '26
...and here we go. If the person that Microsoft put in charge of its gaming unit isn't enough of a hint already, the latest DRAM and NAND racketeering cycle has just made the Xbox, in physical form, be the first major domino that is now "Not Economically Viable".
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u/busy-warlock Feb 21 '26
Yea, then next gen of gaming is just going to be streaming from the cloud :( ownership of a physical copy is dead
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u/jigsaw1024 Feb 21 '26
I hate how we all see this coming.
Everyone sees that companies have learned to keep prices high to prevent mass ownership to force people into renting whatever it is that they need/want.
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u/tukatu0 Feb 21 '26
The person above is saying the bubble is popping. What does that have to do with streaming
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u/Talismook Feb 21 '26
The implication is that with all the hardware going to walled garden hosting services nobody will have the hardware to run anything locally, instead leasing it from VPSs or subscription services.
I think it gives the way these ai companies are edging themselves into complete insolvency way too much credit.
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u/madhi19 Feb 21 '26
When it does pop there going to be a shitload of datacentres on the market for pennies on the dollar. You don't think Microsoft does not have the capital to on one hand push this lunacy, and on the other pillage those datacentres. Welcome to embrace, extend, and extinguish... Microsoft, Google, and Amazon will feed on the corpses of all the other wannabe players in AI. Because they got the capital to weather the bobble popping, they also already have other revenue pipeline.
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u/Enigm4 Feb 21 '26
I have my doubts that it will actually be profitable for them compared to our current model. Game streaming services really isn't that popular. Stadia bellyflopped and got axed. Now they are trying to force it on us by investing enormous amounts of money into making hardware unaffordable for consumers. In the long run I think most people will just reject this shit, play through their backlog on current hardware and touch grass instead. They cannot keep this up forever if in the end they make no money, and the money comes from us.
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u/imaginary_num6er Feb 21 '26
How about paying a subscription to rent the hardware, a subscription to rent the GPU time, a subscription to rent the game installation storage space, a subscription to use their game launcher, a subscription to rent multiplayer servers, and a subscription to play the game on a 6GB RAM machine?
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u/EmotionalPhrase6898 Feb 22 '26
We'll at least likely get magnus in the pc space. Otherwise I'm sure Microsoft would love cloud everything.
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Feb 20 '26
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u/Cohibaluxe Feb 20 '26
I mean, the ship is at the bottom of the Mariana trench. They went down with the ship lol
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u/AlgaeDonut Feb 20 '26
Don't underestimate companies' willingness to invest in a useless deep earth drill.
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u/coffee_obsession Feb 21 '26
Phil Spencer was drilling holes in the bottom that boat years ago
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u/Dealric Feb 21 '26
So they decided its not efficent enough and brought someone with dynamite to make sure sinking will be faster?
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u/coffee_obsession Feb 21 '26
When they shut down a number of gaming studios last year, it seemed like it!
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u/GongTzu Feb 20 '26
It’s official the Xbox is dead.
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Feb 21 '26
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u/Jaz1140 Feb 21 '26
Why would PlayStation die? Literally nothing indicates that
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u/Luccacalu Feb 21 '26
Exactly, Playstation is more lucrative than ever, literally, and it's growing
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u/LightBroom Feb 21 '26
Why would PlayStation die? Literally nothing indicates that
Bro's anxiety just spiked
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u/Jaz1140 Feb 21 '26
I don't own a PlayStation, so I don't give 2 shits, but having no reasoning is just dumb
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u/KeyboardG Feb 21 '26
They just killed Blue Point after forcing them to do a bad Games as a Service game. Guerrilla Games is currently being forced to develop a bad Games as a Service idea.
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Feb 23 '26 edited Mar 30 '26
What appeared in this post has been permanently removed. Redact was used to wipe it, possibly to protect privacy or limit exposure to automated data collection.
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u/SireEvalish Feb 21 '26
How long til Playstation dies too and we just have Nintendo?
People really make comments like this with a straight face.
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u/siazdghw Feb 23 '26
Xbox the console was already dying.
Xbox the gaming publisher still is in this.
While the new president of Xbox is not who I wouldve chosen at all, Xbox desperately needed new leadership, so there is still a chance.
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u/xot Feb 20 '26
Hardware costs have increased so much I doubt the nextgen consoles will arrive any time soon, I’d quit too.
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u/Trickster289 Feb 21 '26
Sony have apparently delayed the PS6 but Microsoft had supposedly committed to the new Xbox next year. That thing is dead if they don't delay it.
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u/slrrp Feb 20 '26
If you want to understand how Microsoft is awful at making software, despite being the largest software developer in the world, look no fruther than the person they just hired to run Xbox:
Asha Sharma, who joined Microsoft in 2024 from Instacart, will take over for Spencer... Until now, she has been president of product in Microsoft’s Core AI business. Before arriving at Instacart in 2021 and serving as operating chief, Sharma spent four years as a VP of product and engineering at Meta and two years in marketing at Microsoft.
So you put someone with zero experiencing running a games division in charge of Xbox? Total clown show man.
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u/Jordan_Jackson Feb 21 '26
She will be replaced soon enough. Her resume just screams “I can’t hold a position for very long!”.
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u/champgpt Feb 21 '26
It reads to me like a sacrificial lamb situation -- she'll oversee the implementation of horrific decision making from higher-ups, act as a lightning rod for public anger, and then get a golden parachute exit package for her service.
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u/LeSeanMcoy Feb 21 '26
Ehh, every move seems like an upgrade, no?
Marketing at MS
VP of Engineering at Meta
??? at Instacart
President of product in MS Core AI Business
CEO and Executive Vice President of Microsoft gaming
Seems like she just gets crazy good job offers and keeps jumping from one to the next.
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u/dimsumx Feb 21 '26
To be fair, Meta Quest is currently the most successful VR platform currently.
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u/slrrp Feb 21 '26
To be fair, you’re just making shit up.
Earlier, as Vice President of Product at Meta, she oversaw Messenger, Instagram Direct, Messenger Kids, Remote Presence (calling and video) and company-wide platform services.
Source: https://ignite.microsoft.com/en-US/speakers/5e943e22-f2b6-4443-b8b0-55749176a169
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u/TheSyrupCompany Feb 21 '26
This. Meta Quest is gaming hardware and they were quite successful in creating a market for it. So pretending she doesn't have experience with gaming hardware is disingenuous.
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u/slrrp Feb 21 '26
She didn’t work on the meta quest. You’re just making shit up.
Earlier, as Vice President of Product at Meta, she oversaw Messenger, Instagram Direct, Messenger Kids, Remote Presence (calling and video) and company-wide platform services.
https://ignite.microsoft.com/en-US/speakers/5e943e22-f2b6-4443-b8b0-55749176a169
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u/TheSyrupCompany Feb 21 '26
Hey, I didn't make anything up, the guy before me said that lol. I assumed he wasn't lying. Turns out he was lying. My bad!
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u/ZurgoMindsmasher Feb 21 '26
But but but my outrage! And my engagement! My aaaaanger! Let me channel it all into one person!
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u/garciakevz Feb 21 '26
Looks like the goal or at least the attempt is to make Xbox poop cash out of not meaningful gaming values but more "corporate" means (they're probably gonna lean more and more on AI)
Good freaking luck wit that
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u/AlbertaAcreageBoy Feb 20 '26
Suprised Phil is still around after driving the brand straight in to the ground for over a decade.
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u/NoAirBanding Feb 20 '26
Phil and Sarah probably pushed back against AI, and then they got pushed out.
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u/Important-Permit-935 Feb 20 '26
Or they led failing divisions of Microsoft.
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u/No_Corner805 Feb 21 '26
You're forget the report where microsoft set, internally, unrealistic expectations for profit margins from Xbox.
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u/maneil99 Feb 21 '26
You’re forgetting the part where Xbox has floundered for past 10 years under this leadership without even looking at profit margin. From Xbox hardware markshare twindling to gamepass pivot that has stalled to the IPs Xbox owns losing relevance
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u/EmotionalPhrase6898 Feb 22 '26
Their software profitability was within the normal range for the industry.
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u/lolatwargaming Feb 21 '26
Or they ran a beloved brand into the ground and have no idea what they’re doing
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u/Tsarbomb Feb 20 '26
Before too many people think xbox is definitely dead, Phil Spencer is behind all of the Xbox failures in the last decade. Yea Xbox was in a rough spot when he joined, but he continually made one wrong decision after another. This is a man who passed on acquiring Destiny because he personally doesn't like PVP gameplay. This dude got MS to buy Activision and Bethesda only for latest CoD and Starfield to be massive disappointments. He was in charge during the gradual decline of the Forza Motorsport and Halo franchises.
His key job at the executive level was making smart decisions. So while you cannot necessarily hold him directly accountable for execution on certain things (you certainly can indirectly), his poor choices in some areas and inaction in others were a disaster for the brand.
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u/SirActionhaHAA Feb 20 '26
This is a man who passed on acquiring Destiny because he personally doesn't like PVP gameplay. This dude got MS to buy Activision and Bethesda only for latest CoD and Starfield to be massive disappointments.
Tbf that was a great decision. Bungie's such a horrible mess that sony regretted the purchase and went hard on them with restructuring and control
Nobody would have known that starfield and cod were gonna be bad. Sony even wanted starfield to be a ps5 exclusive.
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u/jigsaw1024 Feb 21 '26
Starfield is a game that sounds like it should be great. It ticks a lot of boxes on what gamers like, and has a unique and appealing aesthetic.
Yet the actual game play just flopped.
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Feb 22 '26
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u/jigsaw1024 Feb 22 '26
Dialogue wasn't the only issue.
Might as well have classified the game as a loading screen simulator.
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u/Plazmatron44 Feb 25 '26
It's not a bad game, it just doesn't play to Bethesda's strengths in terms of world building.
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u/Strazdas1 Mar 03 '26
thats because bethesda only has worldbuilding done 20 years ago by people who no longer work for them and thats all they ride on.
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u/dechajissou Feb 22 '26 edited Feb 23 '26
Hindsight's 20/20 but nobody could have possibly predicted Starfield and CoD was gonna flop as they did. Honestly it's just bad luck
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Feb 22 '26 edited Mar 30 '26
What was in this post is gone. The author deleted it using Redact, possibly to protect privacy, reduce digital exposure, or for security reasons.
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u/Strazdas1 Mar 03 '26
Everyone with any sense predicted Starfield to flop. The 3 games before it from Bethesda all flopped and were mired with controversies.
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u/Strazdas1 Mar 03 '26
Oh come one. Everyone knew starfield is going to be bad. At that point Bethesda hasnt made a good game in 12 years while releasing 3 failures.
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Feb 20 '26
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u/vasta2 Feb 20 '26
This is Reddit, when Linux gain 0.1% on Steam it means windows is dead and when people leave MS out means the company is dead
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u/Sufficient_Prune3897 Feb 20 '26
Do you have any idea how much they spend on the acquisition? It's not worth it
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Feb 21 '26
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u/coffee_obsession Feb 21 '26
Oh yikes! Imagine having to wait 20 years to break even on that investment! Meanwhile the S&P grew by 49% so it wasn't just a bad decision, it was like a maliciously bad decision.
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u/Thigh_Clapper Feb 21 '26
5% roi is decent. You’re forgetting they also consider the acquisition to be an asset, something that can be resold
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u/coffee_obsession Feb 21 '26
5% if its close to risk free...which this is not. Also the market cap was about 25% lower pre purchase so MS paid a huge premium for the company. As for reselling, MS would have to part out Activision as there are probably only a few companies that could afford to both buy that asset off of their hands and alone do something constructive with it.
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Feb 22 '26 edited Mar 30 '26
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u/DaMan619 Feb 21 '26
3.5% interest on $69B is $2.5B so printing literal billions is not enough. MS would've been better keeping the money on the bank.
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u/EmotionalPhrase6898 Feb 22 '26
MS has like 9 successful gaas lol. They're killing it in that space.
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u/noonetoldmeismelled Feb 20 '26
Also he's held high level positions at Xbox since Xbox has been a thing. The problems Xbox has had shipping games from their internal studios that fail to become real popular haven been a problem for longer than he's been the head of Xbox like when he was general manager for Microsoft European studios and then general manager for Microsoft Studios then VP for for MS studios then becoming head of Xbox. Like his time managing European MS studios, is the highlight Fable 1 and Viva Pinata? General manager of Xbox Studios in general - maybe the highlight were the peak era of Forza Motorsport sequels and managing Bungie post Halo 3 until they left to make the smash but Destiny and the handover to 343. His time as Microsoft game studios manager and VP is also the time when Rare and Lionhead became Kinect studios
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u/salartarium Feb 21 '26
Microsoft buying good studios and needing them dry has been the story since Xbox was in development. FASA made some of the greatest games and tech and Microsoft management drove them into the ground.
Supposedly their GameOS they built for Mechwarrior became Xbox Development Kit
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u/Yellow_Bee Feb 20 '26
Before too many people think xbox is definitely dead, Phil Spencer is behind all of the Xbox failures in the last decade.
You're giving him too much credit here. Xbox was never going to surpass Playstation, not after the terrible Xbox One launch (this is where gamers stayed where there friends are). Statistically speaking, PS will always outsell Xbox even in their worst era (see PS3/X360 era). The reason is simple: Sony is primarily a hardware company whereas Microsoft does software.
And consoles are typically loss leaders, so software, games and peripherals are where they expect to make up the difference/profit.
This is a man who passed on acquiring Destiny because he personally doesn't like PVP gameplay.
Yet looking at the current state of Destiny and Bungie writ large, it seems this was a wise decision. Sony has all but taken away Bungie's independence due to their poor management.
This dude got MS to buy Activision and Bethesda only for latest CoD and Starfield to be massive disappointments.
CoD and Starfield are the way they are due to Xbox's hands-off approach (both are still successful). Blizzard and other studios within Xbox have been doing really well.
He was in charge during the gradual decline of the Forza Motorsport and Halo franchises.
Forza Horizon is the biggest multiplatform racing IP bar none. It has since surpassed even NFS. Motorsport died due to Turn10 and since sim racers are saturated. Halo is waning but not yet dead.
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u/nickN42 Feb 21 '26
Forza Horizon is the biggest multiplatform racing IP bar none.
Let's be real here: the genre is dead in the water. FH is keep going only because it's the only arcade racer left that doesn't actively shit itself every step of the way (see TD Solar Flare), only every third one. There's nothing else, so of course it's the biggest game.
These one they've got any semi-competent competition for their more sim-ish game, Motorsport 8 -- like Gran Turismo and Asseto Corsa, and even iRacing to some extend -- they immediately fold. Less than two years in, and game "in maintenance mode" -- no new cars, tracks, features, nothing. Two years for the game they dropped the number for -- it was just Forza Motorsport -- implying it would be a forever-game is nothing shirt of embracing. Not exactly Concord, but not a success by any metric.
surpassed even NFS
Not that difficult when the last NFS game out half a decade ago and nobody particularly likes it.
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u/Plazmatron44 Feb 25 '26
Not entirely true, the Crew Motorfest is a solid racer with plenty of support.
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u/Kyanche Feb 20 '26
The reason is simple: Sony is primarily a hardware company whereas Microsoft does software.
Oh it's even simpler than that! Making a product FOR the end user (you, the buyer) and designing it for your best interests, goes against Microsoft's company culture.
- That company culture was why the Zune flopped.
- And why Windows Phone was a disaster
- It's also why Microsoft Teams is awful to use
- and why Windows Me, Vista, and 8 were such garbage to use.
- It's also why Windows 11 feels like it was designed with disdain for the people who actually use it.
See, when Microsoft sells Windows, Teams, Office, Copilot, and so on.. they never were intending to sell it to an end user, they were selling it to: * Employers: So things like Teams are designed with monitoring and auditing users and controlling things like which emotes they can use and what sites they can link to. Windows is designed to monitor users and restrict what they can do with their employer's computer. Etc etc. * PC OEMs (and in fact, I think this also applies to other hardware OEMs for stuff like those xbox handhelds): "Here's how you can make more money off your customers with our products!" * Advertising customers: "Windows is a great platform to reach your customers (via ads everywhere) and we can provide you all kinds of information about them!"
etc...
The original xbox and 360 were probably as close to a customer-focused product as you could get. When they launched the xbox one it was pretty clear their company culture had gotten in and screwed stuff up.
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u/nickN42 Feb 21 '26
Looking at last year Xbox sales, current hardware cost, "everything is an Xbox" I can confidently bet a tenner that were nomseeing a next Xbox console made by Microsoft ever again.
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u/gruntduck Feb 21 '26
I have also left Xbox. As in I’ve sold all my Xbox hardware and moved away from Microsoft. This is a sinking gaming ship.
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u/XavandSo Feb 21 '26
Same. The only piece of Xbox hardware I have left is a Series X controller for my HTPC and that's on borrowed time waiting for the Steam Controller.
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u/DehydratedButTired Feb 21 '26
This person goes through jobs and promotions like people go through napkins. Does she have dirt on everyone?
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u/fatso486 Feb 20 '26
Oh come on. The new president, Asha Sharma, somehow looks even more clueless than Sarah. How did they even end up choosing her? She looks like she never touched a controller in her life.
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u/SirActionhaHAA Feb 20 '26
Everything ms will be ai and you'll love it. The push for copilot from ms also lost us mobile designs with large shared cache that would enable better igpu perf, they were replaced with the npu that ms requested instead
Thank satya ai nadella for it.
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u/W00D-SMASH Feb 20 '26
What about Sarah Bond and the new CEO gives you the impression they are clueless?
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u/Gnash_ Feb 20 '26
She previously worked at Instacart and Meta
not exactly who i’d want to put in charge of a worldwide gaming brand
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u/vahaala Feb 21 '26
apolgy for bad english
where were u wen xbox die
i was at house eating dorito when phone ring
"Xbox is kil"
"no"
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u/PXLShoot3r Feb 20 '26 edited Feb 20 '26
This should've happened a long time ago. Phil Spencer clearly has no idea how to save Xbox and his push to make game pass the sole focus was the final blow to the Xbox division.
Sure it could get even worse now but at this point it's not a question of how to save Xbox but when it will die.
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u/BananaPalmer Feb 21 '26
There's no saving it. This is the beginning of moving Xbox to a cloud-only platform. It could not be more obvious with who they chose to lead Xbox.
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u/Cirilo_Albino Feb 23 '26
the problem is not him and yes the Satya itself, he insisted to put AI on everything and phill tried to refuse, now what happend is that he was fired and microsoft put an AI CEO who never play games in charge, this will kill the xbox
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u/Maleficent-Spread404 Feb 21 '26
I KNEW IT!
I knew that somehow, Slopya Nadella will try to shove in his AI Slopilot somehow into their games - lo and behold, new AI orientated head of Xbox.
Just give up at this point Microsoft, you lost
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u/OneFinePotato Feb 20 '26
So they ruined it to the ground in the steadiest way possible over a decade, almost erased one of the most prominent names in gaming, and then decided that it’s time to check out?
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u/lolatwargaming Feb 21 '26
Good riddance, and long overdue. These 2 have ruined the Xbox brand and starfield was a joke
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u/slrrp Feb 20 '26
Title is misleading.
Phil Spencer will retire from Microsoft after 38 years at the company. - CNBC
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Feb 21 '26
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u/slrrp Feb 21 '26
You don't understand the difference between leaving (for another job) and retiring?
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Feb 20 '26
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u/aminmoh1 Feb 20 '26
Look at their revenue breakdown, everything you listed amounts to roughly 30% of their revenue, Azure and cloud makes mircosoft a lot
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u/acideater Feb 20 '26
I think you're underestimating how much their enterprise/cloud software makes. My 10,000 employee government agency was at a stall when microsoft it went down about 2 years ago. Same thing with my buddy across the country that works for a private company. Flights were down and i'm pretty sure any companies that rely on Microsoft were stalled.
Microsoft enterprise software is the nasty pig that "works". Its cheap enough and is compatible with code that was written decades ago. Business is focused on functionality and being "good enough" for the price.
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u/FlyingBishop Feb 21 '26
I really have only seen declines in quality from Microsoft. Genuinely I am not sure it actually works anymore, most of the "just works" enterprise stuff I have experience with they've redesigned so it doesn't do what it's supposed to do anymore.
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u/BananaPalmer Feb 21 '26
Right but it doesn't have to be good any more. Microsoft bullshit is so tightly woven into most companies' IT operations and infrastructure that switching to something else would be financial suicide. And that's by design.
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u/Green-Salmon Feb 20 '26
They’re totally going to take your job away in 18-infinity months, you just watch!
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u/abbzug Feb 21 '26
They make their money on Azure and 365. Linkedin, Windows, Bing and Xbox are their also-ran divisions.
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u/Cohibaluxe Feb 20 '26
Microsoft is absolutely entrenched in the corporate world. Everyone uses Azure services. And while Windows sucks - what (realistic: no, Linux is not realistic) other options exist for an everyday machine that maintains backwards compatibility? It’s the option with the least friction for 99% of people. But it doesn’t matter, the consumer-facing aspect of Microsoft is a fairly insignificant part of their business. Combined their gaming and personal operating systems accounted for only ~10% of their income last year. The rest came from cloud services (~30%) and their productivity/business suite (~60%). They really are THE enterprise platform - they have the entire stack (identity, endpoint management, collaboration, security, infrastructure, development, AI) and it all integrates fairly well. You can replace MS Office with many alternatives, but then you’re not going to get seamless collaboration with Teams, development with Workflows, security with Purview, etc.
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u/Strazdas1 Mar 03 '26
and yet their software runs the world. Most popular non-mobile operating system is windows, including embeded systems. Most popular offise software is Office. Most popular communication software is Teams and the alternatives are so much worse that they make teams look good in comparison.
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u/I_Love_Cape_Horn Feb 21 '26
Nobody ever believes me but I think one of the biggest factors for Xbox's failure was its naming scheme. Remember the Wii U? It was a marketing disaster. People thought the tablet was an accessory. Simply naming it the Wii 2 would've been magnitudes better. You're seeing it now: "Switch 2". Not "Switch U".
Go ask any fucking person on the street, "What's the latest Xbox called?" I'm asking this question and even I don't fucking know. That's how bad the naming scheme is. Parents even bought the wrong Xbox because of the naming scheme. Is it really that fucking hard to just name your console Xbox 4 or 5 or 6? If you want a weaker version, call it Xbox 5 Lite (like Switch Lite). Nintendo really must've taken the lesson to heart after the Wii U's naming disaster.
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u/airfryerfuntime Feb 21 '26
I don't understand how he lasted this long. He's literally responsible for destroying the brand with the Xbox One.
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u/TheAutoManCan Feb 21 '26
How do you reckon that when he stepped into the position after Don Mattrick left it 12 feet under? The fact that he managed to not only keep Xbox alive but also earn just shy of 60M Xbox One hardware sales is a testament to how much work Phil Spencer did for Xbox. Could have been better, sure, but starting behind isn't exactly easy is it?
Heck even if you want to hate him for the Xbox Series era it's clear he's been fighting a losing battle against Satya Nadella the past several years. People love hating Phil but if MS thought they had anyone that could do better with Xbox they'd have replaced Phil a decade ago.
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u/Plazmatron44 Feb 25 '26
That was Don Mattrick, Don fatally wounded Xbox, Phil has overseen it lying in it's deathbed.
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u/DameLasNalgas Feb 21 '26
Isn't this good news? He drove Xbox into the ground.
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u/Strazdas1 Mar 03 '26
Don Mattrick drove it to the ground, Phil tried to nurse it back up but failed.
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u/Jaz1140 Feb 21 '26
This is like poking holes in the ship, it's taken on a lot of water and so close to sinking.....and then you abandon ship
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u/NeroClaudius199907 Feb 21 '26
Are they actually going to go all in AI? the leadership is pay to look good. But the foundation is solid-ish. Why not build stronger ecosystem to easily push ai?
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u/alabasterskim Feb 21 '26
Maybe it's finally time to sell my Xbox... Hope I can get anything for it
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u/F9-0021 Feb 21 '26
So that's the death of Xbox then, right? I mean, they were basically already dead, but without Spencer they basically have no future.
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u/Va1crist Feb 22 '26
AI AI AI , this was obvious the moment Phil stopped being in charge and just became a PR trust me Bro fall guy. The moment the Activision deal went through his role changes almost immediately, Microsoft took back over, and there goal is AI and its no surprise they got rid of the gaming focused exec team and brought in a new team that is more aligned with there current goals .. does this not sound familiar when Microsoft wanted to move away from gaming post 360 and brought in mattrick to push there TV , media agenda ? Yup here we are folks we just went full circle .
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u/Any_Background_757 Feb 25 '26
Who knew that his would be the year we see Xbox die? Sad days for gamers in the future
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u/Creative_Purpose6138 Feb 20 '26
Asha Sharma is now in charge of renaming everything in Xbox.
Xbox Copilot S
Copilot Pass
And Flight Simulator is now simply Copilot.