Xbox is discontinuing development of Copilot for console and winding down its mobile version, as new CEO Asha Sharma initiates a strategic reset for the gaming division. The decision marks a reversal of Microsoft’s earlier push to integrate AI tools across its consumer platforms and signals a shift in Xbox’s product priorities under Sharma’s leadership.
Overview
Sharma, who took over as Xbox CEO in February 2026 following Phil Spencer’s retirement, announced the Copilot changes in an internal memo reported by CNBC. She stated that the AI features no longer align with Xbox’s current direction, emphasizing the need for faster execution and stronger community engagement. “Xbox needs to move faster, deepen our connection with the community, and address friction for both players and developers,” Sharma wrote.
The Copilot discontinuation affects both console and mobile platforms. Development for console integration is being stopped entirely, while the mobile version will be gradually phased out. No timeline for the wind-down was provided.
Leadership Changes
The organizational overhaul includes the appointment of five new executives, four of whom are transitioning from Microsoft’s CoreAI division:
- Jared Palmer, former CoreAI vice president and GitHub senior vice president, joins as a member of technical staff overseeing product, engineering, developer tools, and infrastructure.
- Tim Allen, previously leading design and research at CoreAI and GitHub, assumes leadership of Xbox design.
- Jonathan McKay, ex-head of growth for ChatGPT at OpenAI, becomes Xbox’s head of growth.
- Evan Chaki, a CoreAI general manager, will lead a forward-deployed engineering team at Xbox.
- David Schloss, formerly senior director of product and growth at Instacart, takes charge of Xbox’s subscription and cloud business.
Two long-tenured Microsoft executives are exiting their roles:
- Kevin Gammill, corporate vice president for Xbox user experience, game development, and publishing platforms, is leaving the company.
- Roanne Sones, corporate vice president for Xbox devices and ecosystem, will take a leave of absence after summer 2026 before transitioning to an advisory role.
Both Gammill and Sones had spent 24 years at Microsoft.
Sharma joined Microsoft in 2024 after executive roles at Meta and Instacart, most recently serving as president of product in the CoreAI engineering group before moving to Xbox. This leadership reshuffle follows her earlier decision to reduce the price of Game Pass Ultimate, which she acknowledged in a leaked internal memo had become too expensive.
Context and Strategy
The move to halt Copilot development reflects broader challenges in deploying large language models within gaming environments, where real-time performance, latency