Xbox CEO Asha Sharma has halted development of the Copilot AI assistant on console and is beginning to wind down Copilot on mobile platforms while simultaneously executing a sweeping leadership shake-up. According to Dexerto, Sharma confirmed in a memo to staff that “we will begin winding down Copilot on mobile and will stop development of Copilot on console,” as part of broader efforts to reverse declining revenue at Xbox. This was also reflected in a message shared on X, where she emphasized the need to move faster and deepen connection with the community. Dexerto’s report draws on internal communications and coverage by CNBC.
Leadership Reshuffle
The leadership overhaul includes bringing in several former executives from Microsoft’s CoreAI division. Key roles reshuffled include:
- Jared Palmer, previously a vice president at CoreAI and senior vice president at GitHub, has joined Xbox in a senior engineering leadership role advising Sharma.
- Tim Allen moved from a design role at CoreAI to lead design at Xbox.
- Jonathan McKay, formerly involved with growth at CoreAI (and OpenAI), now leads growth efforts at Xbox.
- Evan Chaki, a former CoreAI general manager, now leads a forward-deployed engineering team focused on improving development workflows.
- David Schloss, with prior leadership experience at Instacart, is responsible for Xbox’s subscription and cloud business segments.
These arrivals coincide with departures among long-standing Microsoft Xbox executives. Kevin Gammill and Roanne Sones—each with over two decades at the company—are stepping aside; Gammill is leaving, while Sones will transition to an advisory role following a leave of absence. Dexerto, Tom’s Hardware, and other outlets corroborate these leadership changes with consistent details as reported in internal memos and on X.
Business Context
The changes come amid notable declines in Xbox’s recent financial performance. In the latest quarter, Xbox hardware revenue dropped by roughly 33%, while overall gaming revenue fell about 7%, including a 5% year-over-year decrease in content and services. Sharma publicly acknowledged that player and revenue growth had not yet met expectations, signaling urgency to recalibrate strategy and operations, as reported by PC Gamer and other industry outlets.
Analysis
This pivot suggests a strategic retreat from highly visible AI-enhanced consumer features like Copilot, likely responding to lukewarm reception or internal prioritization shifts. Simultaneously, embedding AI-savvy leaders into key Xbox roles indicates a longer-term effort to incorporate AI into development processes rather than direct end-user products. Industry observers may interpret this as deprioritizing flashy AI deployments while reinforcing infrastructure and operational efficiency.
Conclusion
Asha Sharma’s tenure as Xbox CEO, which began in February following Phil Spencer’s departure, is already marked by significant transformation. The Copilot cancellation and executive overhaul reflect an aggressive reorientation amid falling revenues. Whether these moves succeed in restoring Xbox’s momentum remains to be seen, but they clearly demonstrate a focus on agility, fundamentals, and leadership alignment with Sharma’s vision.