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Microsoft reorgs its Xbox and marketing teams to prepare for an AI and gaming future

Microsoft reorgs its Xbox and marketing teams to prepare for an AI and gaming future


Xbox gets ready for Activision Blizzard, and Microsoft gets ready for more AI.

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Illustration by Alex Castro / The Verge

Microsoft is reorganizing its Xbox gaming and marketing leadership, less than two weeks after acquiring Activision Blizzard. Microsoft is promoting Matt Booty to president of game content and studios, including the new responsibility of ZeniMax, and Sarah Bond to Xbox president, overseeing all Xbox platform and hardware work. On the marketing side, chief marketing officer Chris Capossela is stepping down after 32 years at Microsoft.

The Xbox changes mean Booty will now lead an expanded organization inside Microsoft Gaming that now includes ZeniMax and Bethesda. “ZeniMax will continue to operate as a limited integration entity led by Jamie Leder, President and CEO, reporting to Matt,” explains Microsoft Gaming CEO Phil Spencer in an internal memo obtained by The Verge.

Booty’s expanded role should help Microsoft Gaming avoid scenarios like Redfall in the future, with Microsoft clearly focusing on better collaboration between the teams it acquired with the ZeniMax / Bethesda acquisition.

“Great games are fundamental to everything we do,” explains Spencer in his memo. “We believe that an expanded gaming content organization — one that enables Xbox Game Studios and ZeniMax’s development studios to collaborate effectively together — will empower those world-class studios to do their best work in growing our portfolio of games players love.”

BAFTA Games Awards 2023 - Show
Sarah Bond at the BAFTA Games Awards earlier this year.
Photo by Stuart Wilson / BAFTA / Getty Images for BAFTA

Bond will now take over the hardware and software platforms of Xbox. “To manage the platform of today, and build the platform of tomorrow, we are bringing together the teams that will make this possible,” explains Spencer. “Sarah Bond will lead this team as President of Xbox — bringing together Devices, Player & Creator Experiences, Platform Engineering, Strategy, Business Planning, Data & Analytics and Business Development.”

Bond has been a rising star inside Xbox at Microsoft since joining in 2017, particularly behind the scenes of the recent acquisition of Activision Blizzard. Bond even appeared during the FTC v. Microsoft hearing to explain video games and the Xbox business to Judge Jacqueline Scott Corley.

Bond will now be responsible for the future of Xbox, both in hardware and software — which may include a redesigned disc-less Xbox Series X next year and a next-gen hybrid console in 2028.

These Xbox leadership changes mean there will be more women in gaming leadership roles at Microsoft than men once Bobby Kotick, CEO of Activision Blizzard, departs at the end of 2023. Here’s the new Xbox org chart:

Microsoft’s new Xbox / gaming leadership.
Microsoft’s new Xbox / gaming leadership.
Image: Microsoft

Over on the marketing side, chief marketing officer Capossela is stepping aside to make way for Takeshi Numoto. “Takeshi has been at the heart of our Cloud transformation,” says Microsoft CEO Satya Nadella in an internal memo to employees. “I’m thrilled for him to step into the CMO role for Microsoft and drive our vision forward.”

Capossela has been at Microsoft for 32 years and famously appeared onstage alongside co-founder Bill Gates during a presentation where a prerelease version of Windows 98 crashed into a Blue Screen of Death. Capossela has led marketing at Microsoft for decades, throughout the transition to cloud, the launch of Xbox, and many more moments.

Microsoft is also promoting Yusuf Mehdi to executive vice president, consumer chief marketing officer — with a place on the senior leadership team. Mehdi first joined Microsoft in 1992, working on product management for Internet Explorer and Windows before helping lead Microsoft’s entry into search with Bing. He’s been involved in Surface, the Windows 10 launch, and the HoloLens headset.

“Yusuf will serve as the champion of our end-user experiences and build on his work launching several of our AI-powered services to lead Microsoft Copilot product marketing,” explains Nadella in his memo. “He will also continue to lead our Search, Ad, & News and Devices & Creativity Customer Solution Areas (CSAs).”

Microsoft Holds Launch Event At Headquarters
Yusuf Mehdi has been leading the consumer AI push at Microsoft.

Microsoft is also moving its consumer sales organization to the Microsoft Gaming team. Led by Ami Silverman, this is the team responsible for Microsoft’s consumer retail work. “Ami’s charter crosses all consumer products, including Devices & Creativity (Windows, Surface, M365) and all things Gaming,” explains Spencer. “This team’s focus will be to transform the gaming sales motions and attract new audiences across geographic markets.”

Microsoft will need to carefully integrate Activision Blizzard into its Microsoft Gaming division. Dave McCarthy, who is currently the chief operations officer of Microsoft Gaming, will lead the efforts on the operations side. We’re now waiting on Microsoft to name a new Activision Blizzard CEO to replace Kotick at the end of the year.

Microsoft’s reorgs here are clearly about its potential in gaming and AI. “With our recently closed acquisition of Activision Blizzard King, we are doubling down on our Gaming business,” says Nadella. Microsoft closed its Activision Blizzard acquisition earlier this month, with plans to announce which games are coming to Xbox Game Pass in the coming months.

Microsoft has been integrating AI into Windows, Office apps, Bing, and much more in an attempt to be an early leader in AI. Microsoft 365 Copilot launches next week, allowing businesses to generate emails, rewrite paragraphs, analyze Excel data, and a lot more. Nadella discussed the potential for AI during Qualcomm’s Snapdragon Summit earlier this week.

“When Windows first came together we had the Start button, the Copilot is like the Start button,” said Nadella earlier this week. “It becomes the orchestrator of all your app experiences. So for example, I just go there and express my intent and it either navigates me to an application or it brings the application to the Copilot, so it helps me learn, query, and create — and completely changes, I think, the user habits.”

You can read Spencer’s full memo on the Xbox changes right here.