Xbox co-founder believes it’s being ‘sunsetted’ in favour of AI, calls new CEO ‘a palliative care doctor’

Xbox co-founder Seamus Blackley believes that Microsoft’s gaming brand is being “sunsetted”, and that its new CEO has been brought in “as a palliative care doctor who slides Xbox gently into the night”.

The game designer and industry veteran made the comments in an interview with GamesBeat, in which he reacted to last week’s news that former AI executive Asha Sharma is replacing Phil Spencer in a major shakeup of Xbox’s leadership team.

Blackley – who left Microsoft in 2002 after launching the original Xbox – said that he believes Sharma’s appointment over those with a background in video games indicates that Microsoft’s gaming future will be dominated by generative AI.

He also praised outgoing boss Phil Spencer, who he said had likely been worn out spending a long time “managing the beast so that he could continue to try to do the right thing for games”.

“Satya Nadella has made an incredible number of bets and invested an incredible amount of money and credibility in the transform model AI future,” Blackley said. “Xbox, like a lot of businesses that aren’t the core AI business, is being sunsetted. 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.

“It just seems really true,” he continued. “I imagine asking somebody if it made sense to put a major motion picture studio into the hands of somebody who didn’t like movies, or a major record label into the hands of somebody who’d never seen a live show. Why would you do that? Well, you only do that if you’re looking at the problem in a more abstract way.

“The natural consequence of the focus on AI is that AI abstracts every problem from the minds of the executives who believe in it. We’re abstracting the problem of games as well. There’s a core belief, and you can see it in what Satya said, that AI will subsume games like it will subsume everything.”

The Xbox co-founder said he believes that, “whether or not you agree with” generative AI, Microsoft is ushering all of its business units towards it, including gaming.

“That is in no way surprising,” he said. “It would have been shocking if they had somebody in there in a meaningful role who was passionate about games, passionate about the creator-driven business of games, because it would be in direct conflict with everything else Microsoft is doing.

“Microsoft is a company that is now about enabling its customers by enabling AI to drive things. That’s at odds with the auteur model of any art, but specifically of games. Microsoft doesn’t have the problem that Apple does, or that Netflix does, where they have an auteur-driven content model to manage. Games are the only place where they have a content business.”

In her joining statement published last week, incoming Xbox CEO Sharma specifically highlighted AI’s future role within the gaming division, claiming that Microsoft won’t flood its games with “soulless AI slop”. “AI has long been part of gaming and will continue to be,” she said, noting that gaming needs new “growth engines,” but that “great stories are created by humans.”

Blackley, however, dismissed the comments as “what every single person who’s been brought into games from other industries has said when they’re hired, in every press release, probably going back longer than you and I have been in this business.”

He also shared some advice for the new Xbox boss, urging the exec to “leave this job soon” if she can’t develop a passion for games, and urging her to speak to former games leaders for advice.

“If you want to look for people to emulate, you look at Shuhei Yoshida,” he said. “I’d tell her to go and spend a day with Shu. Go and spend a day with Peter Moore. Go and spend a day with Phil Harrison.

“Go and spend a day, if you can, with some of the guys from Nintendo. Find Reggie. Spend a day with Reggie. Go and talk to those leaders about how they succeeded and failed in the business. Learn from them. Don’t try to make it up on your own. Go get that data. They’re all out there.

“I’m sure Reggie–shit, there’s a recently-departed executive from Nintendo who might be very interesting for her to talk to, right? That would be my advice. Go talk to all of those people.”