Xbox Co-founder warns the brand is being quietly sunsetted under new CEO

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One of the original minds behind Xbox is sounding the alarm. Seamus Blackley, the game developer and co-founder who helped convince Microsoft to enter the console market over 26 years ago, sat down with GamesBeat this week and delivered a sobering assessment of where the brand is headed: nowhere good.

According to Blackley, Xbox isn’t being reinvented under its new leadership, it’s being slowly phased out, and the latest executive appointment is the clearest sign yet.

“Xbox, like a lot of businesses that aren’t the core AI business, is being sunsetted,” Blackley said. “They don’t say that, but that’s what’s happening. I expect that the new CEO, Asha Sharma, her job is going to be as a palliative care doctor who slides Xbox gently into the night.”

A leadership shakeup that speaks for itself

The comments come in the wake of one of the most significant reshuffles in Xbox history. Phil Spencer, who led Microsoft Gaming for over a decade and became the face of the brand for millions of fans, announced his retirement.

Sarah Bond, the Xbox president who was widely seen as his natural successor, resigned shortly after. And the person chosen to fill that void was Asha Sharma, an executive who came directly from Microsoft’s CoreAI department, with no prior background in the video game industry.

For Blackley, that appointment isn’t a coincidence. It’s a strategy. He believes Microsoft CEO Satya Nadella has committed the entire company to an AI-driven future, and that any business unit that doesn’t directly serve that vision, including gaming, is being quietly redirected toward irrelevance. “The job of all these people is to just gently usher all of these business units into the new world of AI,” he said. “That’s what you’re seeing here.”

Blackley also praised outgoing boss Phil Spencer, describing him as someone who spent years trying to protect games from becoming just another Microsoft product, until the weight of that fight eventually wore him out.

Sharma has responded, but Blackley isn’t convinced

Sharma, for her part, has pushed back on this picture. In an internal email that circulated publicly, she committed to serving Xbox fans, pledged not to let the platform be overrun with what she called “soulless AI slop,” and signaled a renewed focus on exclusive games. On the surface, it reads like exactly what the gaming community needed to hear.

Blackley, however, has seen this playbook before. He dismissed her reassurances as the standard language every outside hire delivers when they first arrive in the games industry, well-intentioned words that tend to give way to broader corporate priorities over time.

His advice to Sharma was direct: if she can’t develop a genuine passion for games, she should leave the role. And if she wants to understand what real gaming leadership looks like, she should go spend time with people like Shuhei Yoshida, Peter Moore, Phil Harrison, and Reggie Fils-Aimé.

Whether Blackley’s read on the situation turns out to be accurate or overly pessimistic is something only time will answer. But when one of the people who built Xbox from the ground up says the brand is on its way out, it’s hard to just scroll past that.

What do you think, is Seamus Blackley reading the situation correctly, or is he being too harsh on a leadership change that hasn’t even had time to prove itself? Jump into the comments and let us know which side you’re on. This is exactly the kind of debate the Xbox community needs to be having right now.