The Xbox brand just underwent a seismic shift. On Friday afternoon, news broke that Microsoft Gaming CEO Phil Spencer had retired from the company. Also out was Sarah Bond, who resigned from her role as President at Xbox. Asha Sharma, President of CoreAI at Microsoft, stepped in to lead the Xbox brand as CEO.
It’s a whirlwind of news that’s sure to leave the industry speechless. What’s next for Xbox in the wake of such a major change? Does Sharma’s new role mean that we should expect a total pivot to AI? Is this the end of Xbox as we know it? Analysts will no doubt spend the next few weeks untangling a complicated web of reactions as developments in Xbox’s business drip out.
Confusing questions like this demand clear answers. And there’s no one better to provide those answers than someone who has worked in the complex Microsoft ecosystem before: Clippy.
Raised in a world before the advent of generative AI, the paperclip helper built his reputation on guiding users through the complexities of Microsoft products. I sat down with Clippy to understand what exactly is happening at Microsoft and what’s next.
Thanks for speaking with me today, Clippy. I want to get your thoughts on some news at Microsoft as someone who’s seen the inner workings of the company.
[Clippy turns into a paper airplane and flies back into his seat.]
Hi, I’m Clippy, your Microsoft helper. Would you like some assistance today?
Yes, thanks. So, as we now know, Spencer and Bond are out at Xbox. Many people are wondering what this means for the company. What do you make of the chaos?
It looks like you’re confused about Xbox! Would you like help?
> Get help understanding Phil Spencer?
> Continue interview without help
Well, no, I think I understand the Spencer part. His departure isn’t the biggest surprise given that the Xbox business has been in dire straits in recent years. We’ve heard reports of demanding goals imposed on the brand, which have led to pricier hardware and services. Naturally, he was always going to be vulnerable as a sacrificial lamb. I think what happened there is probably straightforward.
Okay! I’ll let you continue the interview without help. Let me know if you need he—
Well, wait, I have some other questions.
Okay! What can I help you with?
Let’s start with the Sarah Bond detail. It was always treated as a foregone conclusion that she would take over Xbox once Spencer retired one day. Her resignation seems to be a sign of some internal chaos that’s yet to be uncovered. I mean, reports suggest that Bond didn’t even send a formal resignation email to the Xbox team, something that seems to indicate that the breakup was messy.
Okay, so you want help writing an email?
No.
Okay, do you have any questions about Office?
Well, yeah, I suppose that’s what I’m getting at, in a way. What is the office culture like within Xbox right now? From an outside perspective, it feels like the vision for the business, which was led by Spencer, has totally fallen apart. Bond splitting indicates to me that something is changing about the direction of Xbox internally, which maybe Bond doesn’t agree with. Morale within Xbox must be low right now, and I have to wonder if that will lead to more resignatio—
[Clippy begins to take a nap on a little pad of paper, with big Zs rising from his head.]
Clippy?
[Clippy snaps to attention, turns into a bicycle, rides around in a circle, and skids to a stop.]
Hi, I’m Clippy, your Microsoft helper. Is there anything else I can help you with today?
Yes. Help me understand where AI fits into this. With Asha Sharma entering the picture, that seems to indicate that Xbox is going to go all-in on generative AI. I mean, we’ve already seen the brand pushing towards that for quite some time. It wasn’t too long ago that Microsoft put out an AI-generated version of Quake to show off what its tech could do within gaming. But at the same time, Sharma is pushing back against that narrative. In an internal memo, she promised that she wasn’t going to flood the Xbox ecosystem with “soulless AI slop.” Fans might be skeptical of that line given Microsoft’s enormous investment in generative AI. Something isn’t quite right there, is it?
Would you like me to perform a spell check?
Do you mean a smell check?
It looks like you misspelled spell. Would you like me to correct that?
I don’t think so, no.
Okay!
[30 seconds of silence pass.]
Great. So I guess I’m just left wondering—
Did you know that I can help you with lots of things in Microsoft Office? For example, I can help you write an email—
No, I’m more asking you where Xbox goes from here. I’ve been struggling to find an answer to that question in the immediate wake of all this. My kneejerk reaction is to say that the Xbox brand, as we know it, is dead. That seems like the obvious takeaway after years of shuttered studios, canceled games, the death of console exclusives, and countless other business decisions that fly in the face of conventional console market wisdom. But Sharma maintains that she is committed to continuing Xbox’s console business. Every question just leads to more questions, and no matter how much I dig into it, I’m just not finding the answers I need.
I’m sorry.
What?
I’m sorry that I can’t help you find the answers you need today.
[A big cartoon teardrop falls from Clippy’s eyes.]
Oh. Oh, Clippy, no. It’s not your fault. I don’t think anyone has the answers to this right now, honestly. As much as I want to break this down and give readers some sense of what to expect next, I think the reality is that we’re going to have to wait for the dust to settle. The news just broke. Things are going to be chaotic for a few weeks. We’re going to hear a lot of accounts from anxious developers within Xbox and leaked details about Sharma’s vision. There are going to be rumors and misinterpretations. This isn’t something that a spell check is going to clear up. We’re going to need to take it as it comes and accept that it’s going to be a confusing change with no immediate answers.
Okay. I’ll leave you alone for now. Let me know when you have any questions that I can answer!
I will, Clippy. I promise I will.
[Clippy sprouts angel wings and ascends into a beam of bright light above him. I think he died?]
