It’s officially the end of an era for Xbox – but where’s the hope?

Public relations professionals know this: a company forced to share bad news will do so on a random Friday afternoon – in the hopes that, come Monday, the worst will have blown over. That is exactly what Microsoft did, by announcing that both Phil Spencer, the head of Xbox for more than 14 years, and Xbox president Sarah Bond, the executive widely expected to be his eventual successor, are leaving the company. Taking over as the new CEO of Xbox is Asha Sharma, previously head of CoreAI, Microsoft’s department focused on AI models, apps and agents.

It’s no secret that the Xbox side of Microsoft’s business has been going through a rough transition – one many believe it may not survive in the long term – but the top two people running it departing the company at the same time is not a coincidence. If anything, it’s a signal of more future changes. However one chooses to interpret it, it is also a turning point: it officially marks the end of an era. Not just the Phil Spencer era, but the Xbox console era as defined by four generations of head-to-head competition with Sony’s PlayStation. The Xbox is now entering uncharted waters… and doing so while being at its most vulnerable.

In the context of what this change in leadership may be signaling in terms of Xbox’s future direction, it’s hard to ignore Asha Sharma’s previous AI-focused role. Before Spencer’s and Bond’s departures she didn’t have anything to do with Microsoft’s gaming business, so – at a time when online discussions about the negative effects of AI on gaming development are held on a daily basis – her taking over the Xbox reigns does not look exactly promising. Quite the opposite, in fact.

Sharma is aware of that, seemingly trying to alleviate fears regarding the involvement of AI in the gaming side of things. In her own internal memo she states that “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, created with the most innovative technology provided by us”.

That’s all well and good but, with AI being at the center of basically everything Microsoft is doing these days, Sharma’s statement sounds hollow. It is what Xbox gamers or consumers in general would like to hear, yes, but not necessarily what Satya Nadella and the rest of the company’s leadership have in store for the Xbox business going forward. There were other people within its ranks, far more experienced when it comes to everything Xbox, that could have been appointed instead of Asha Sharma. The fact that it was a former AI-focused executive (one with no ties to “the old Xbox” and its history) that did, speaks volumes.

The Xbox is dead, long live the (new) Xbox

What’s also contradictory is Sharma’s promise to revive the Xbox as consumers remember it – despite Microsoft’s new strategy being all about leaving the traditional console business model behind. She states that the company “will recommit to our core Xbox fans and players, those who have invested with us for the past 25 years” and that they will “celebrate our roots with a renewed commitment to Xbox starting with console, which has shaped who we are. It connects us to the players and fans who invest in Xbox”.

That would have been great news for Xbox gamers – for the people who showed up despite Microsoft’s failings – had it not been immediately followed by this note: “Gaming now lives across devices, not within the limits of any single piece of hardware. As we expand across PC, mobile and cloud, Xbox should feel seamless, instant and worthy of the communities we serve. We will break down barriers so developers can build once and reach players everywhere without compromise”. So, as Microsoft has been trying to convince everyone, Xbox is not a console: it’s a vague concept that means different things, in different ways, under different circumstances.

This is in line with what many industry insiders and information leakers expect of the Xbox to eventually become in terms of hardware: not a device or a couple of devices of locked tech specs – like the Xbox Series S/X were – but a generic platform of flexible specs on which different devices of different capabilities, at different price points and built by different manufacturers, would be based. Those would basically be Xbox-branded PCs (powered by Windows no less), the only actual difference between them and commonplace gaming PCs being an emulation layer that makes the former capable of running past Xbox games.

Xbox officially on a different path… for better or worse

While this does not seem like a bad plan at first glance (not for Microsoft anyway), it’s problematic on several levels and it will be a long while before it’s clear whether it actually worked in favor of consumers too. For the time being, judging from the reactions of Xbox fans online, not a lot of them seem happy with these news or optimistic about the future of the platform. If anything, many of them seem to feel that Phil Spencer’s departure sounds too much like the death knell for the Xbox they knew and loved over the span of two decades.

In this sense, sadly, they are not wrong. Regardless of whether Phil Spencer actually did a good job or not over the last 14 years, regardless of whether he or Microsoft’s senior leadership were responsible for the mismanagement and mistakes that led to this, what the Xbox platform used to mean is now officially over. Microsoft’s gaming efforts have been following a different trajectory for some time and will continue to do so: the Xbox is now more of a sales funnel to a content gate than anything else, Microsoft is the world’s largest video games publisher, Windows is still an important asset the company can leverage and AI will be a part of everything it does, including gaming. As a whole, these will reshape the Xbox into something else entirely. It is that simple.

Online speculation about the departure of Phil Spencer or – especially – Sarah Bond from Microsoft is rife and there may be a point in finding out what’s actually been happening behind the scenes at Xbox over the last few months. At the end of the day, though, we do not need all the corporate drama details to see this change in leadership for what it truly is. It is the point of no return for the Xbox and the video games industry at large. Microsoft is heading towards a multi-platform, services-focused, AI-infused future and the Xbox is just baggage it will unceremoniously leave behind at its earliest convenience. Twenty five years of gaming history reduced to an empty brand name. If that is not a depressing though, then yours truly does not know what is.