Wednesday was a dark day for Windows and Xbox maker Microsoft, with the firm announcing over 9,000 layoffs and raising its 2025 total to 15,300. The company's gaming division was one of several that was affected significantly, and as part of the cuts, multiple projects — including Rare's new property Everwild, ZeniMax Online Studios' unannounced upcoming MMORPG, and The Initiative's Perfect Dark — were all cancelled. The Initiative as a studio has also been shuttered, its partnership with Tomb Raider developer Crystal Dynamics ended abruptly by the closure.
There's no way to sugarcoat it: it's a terrible day to be an Xbox fan, with these layoffs adding to years of brutal game industry cuts and undermining recent excitement in Microsoft's gaming brand spurred on by the Xbox Games Showcase and the announcement of the Xbox Ally handhelds.
Amidst the negativity, though, even more rumors began to spread from Call of Duty leaker TheGhostOfHope: a claim that Microsoft Gaming CEO and Xbox head Phil Spencer will be stepping down from his role after the next generation Xbox console releases (rumored to be planned for 2027), with Xbox president Sarah Bond taking the reins.
However, Microsoft CCO Frank Shaw just shot down the reports, saying that they were "made up." That's about as direct as a denial as there is, and it comes directly from a Microsoft executive.
so long as by "summed it up" you mean "made it up."July 2, 2025
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Our own sources have indicated that there is currently no definitive "plan" in place for Phil Spencer to retire, despite ongoing rumors and speculation. Although it's quite easy to predict that the long-tenured Xbox CEO will retire "eventually," some indeterminate amount of time after the launch of the next-gen Xbox console, with Microsoft President Sarah Bond the obvious candidate to succeed.
Indeed, Spencer — aged 57 — will inevitably step down from his position at some point. What's been made clear by Microsoft, though, is that that's not something that's going to happen soon or imminently, and that the longtime Xbox lead will remain at the heart of the company's gaming business moving forward.
It's worth noting that Spencer has been a part of the Xbox team since the brand's inception and the launch of the original Xbox console in 2001, and was promoted to head of Xbox in 2014. In 2017, he joined Microsoft's senior leadership team as the executive vice president of gaming and was made the CEO of Microsoft Gaming in 2022 when the firm announced its intent to acquire Activision Blizzard (notably, the deal closed in late 2023).
Microsoft's current multiplatform and subscription-focused strategy for the Xbox business has largely come from decisions, features, and services that have been made during Spencer's tenure. The most obvious of these is the globally popular Xbox Game Pass program available on Xbox and PC that gives players access to countless games in exchange for a monthly fee, but Xbox Play Anywhere cross-progression and ownership, Xbox Cloud Gaming, and the Xbox PC gaming app on Windows have all been developed and released under his leadership as well.
With Microsoft looking to expand the reach of Game Pass and Play Anywhere to other devices like the upcoming Xbox Ally handhelds and even eventually develop its own mobile gaming store to tap into that market, I can't exactly say I'm surprised that Spencer doesn't have plans to step down in the near future. The firm is clearly all in with the direction that he's been taking Xbox over the last several years, and it's not turning back.
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