Blab Business
Microsofts Xbox Game Studios Loses Head and Chief of Staff Amid Leadership Shake-Up
On June 15 2026, the Xbox Game Studios (XGS) leadership baton was dropped, leaving the division in a brief interregnum. Craig Duncan, who had helmed XGS for 18 months since taking over from Alan Hartman in November 2024, announced his departure, and his chief of staff, Louise O’Connor, promoted in September 2025, confirmed she would step down as well.
In a heartfelt email to employees, Duncan said his mission had been to serve the studios, teams, and developers that build games for the division. He highlighted the team’s record of “many flawless launches that drove business success for the company,” and praised O’Connor as a “thoughtful, creative, and trusted partner” who had provided clarity and care to the studios.
With Duncan gone, the studios that make up XGS—including Rare, Playground Games, Halo Studios, The Coalition, and others—will report directly to Matt Booty, the division’s chief content officer. Booty had been the head of XGS before being promoted to chief content officer when Asha Sharma became CEO of the Xbox division earlier in 2026. Sharma’s appointment carried a promise of a “reset” for the next 100 days, intended to realign strategy and culture, though analysts have warned it could be accompanied by layoffs. A recent report from The Information indicated that Microsoft is considering more dramatic changes, including spinning out Xbox or restructuring the division as a wholly‑owned subsidiary.
The leadership change follows a broader reshuffle in Microsoft’s gaming division, which now includes Activision Blizzard, Bethesda, and other studios under Sharma’s oversight. Her focus has been on returning to the core values of the Xbox brand and ensuring that the console remains central to Microsoft’s strategy.
Duncan’s tenure at XGS began after Hartman’s retirement in November 2024. Hartman had led the studio since 2019. Duncan, a long‑time Rare veteran, oversaw the development of titles such as Sea of Thieves and was credited with maintaining Rare’s reputation for high‑quality games.
The departure of both Duncan and O’Connor comes at a time when the gaming industry is experiencing significant consolidation and restructuring. Microsoft’s 2023 acquisition of Activision Blizzard and its ongoing efforts to streamline its studio portfolio have added pressure on XGS to demonstrate efficiency and profitability.
Industry observers note that the immediate impact will be on the studios’ day‑to‑day operations. Without a dedicated studio head, the studios will rely on Booty’s oversight until a new chief executive is appointed. Booty’s experience as former XGS head should provide continuity, but the lack of a single point of leadership could affect decision‑making speed.
The potential for layoffs remains a concern. While Sharma has publicly denied that layoffs are imminent, the possibility of cost‑cutting measures cannot be ruled out. The Information report suggests that Microsoft could consider spinning out Xbox or restructuring it as a separate subsidiary, which would have implications for staffing and investment.
The gaming community has reacted with a mix of uncertainty and cautious optimism. Fans of Rare and other studios are watching closely to see whether the studios will maintain their creative output under new reporting lines.
Microsoft has not yet announced a successor for Duncan or a new chief of staff. The company’s next public update is expected during its upcoming earnings call in July, where it may address the leadership transition and any plans for restructuring.
In summary, XGS is currently operating under a transitional leadership structure with Matt Booty overseeing the studios until a new chief executive is named. The departure of Craig Duncan and Louise O’Connor coincides with a broader reset announced by CEO Asha Sharma, and the possibility of layoffs or a spin‑out remains on the table. The gaming division’s next earnings report and any regulatory filings will likely provide further clarity on the division’s future direction.
In a heartfelt email to employees, Duncan said his mission had been to serve the studios, teams, and developers that build games for the division. He highlighted the team’s record of “many flawless launches that drove business success for the company,” and praised O’Connor as a “thoughtful, creative, and trusted partner” who had provided clarity and care to the studios.
With Duncan gone, the studios that make up XGS—including Rare, Playground Games, Halo Studios, The Coalition, and others—will report directly to Matt Booty, the division’s chief content officer. Booty had been the head of XGS before being promoted to chief content officer when Asha Sharma became CEO of the Xbox division earlier in 2026. Sharma’s appointment carried a promise of a “reset” for the next 100 days, intended to realign strategy and culture, though analysts have warned it could be accompanied by layoffs. A recent report from The Information indicated that Microsoft is considering more dramatic changes, including spinning out Xbox or restructuring the division as a wholly‑owned subsidiary.
The leadership change follows a broader reshuffle in Microsoft’s gaming division, which now includes Activision Blizzard, Bethesda, and other studios under Sharma’s oversight. Her focus has been on returning to the core values of the Xbox brand and ensuring that the console remains central to Microsoft’s strategy.
Duncan’s tenure at XGS began after Hartman’s retirement in November 2024. Hartman had led the studio since 2019. Duncan, a long‑time Rare veteran, oversaw the development of titles such as Sea of Thieves and was credited with maintaining Rare’s reputation for high‑quality games.
The departure of both Duncan and O’Connor comes at a time when the gaming industry is experiencing significant consolidation and restructuring. Microsoft’s 2023 acquisition of Activision Blizzard and its ongoing efforts to streamline its studio portfolio have added pressure on XGS to demonstrate efficiency and profitability.
Industry observers note that the immediate impact will be on the studios’ day‑to‑day operations. Without a dedicated studio head, the studios will rely on Booty’s oversight until a new chief executive is appointed. Booty’s experience as former XGS head should provide continuity, but the lack of a single point of leadership could affect decision‑making speed.
The potential for layoffs remains a concern. While Sharma has publicly denied that layoffs are imminent, the possibility of cost‑cutting measures cannot be ruled out. The Information report suggests that Microsoft could consider spinning out Xbox or restructuring it as a separate subsidiary, which would have implications for staffing and investment.
The gaming community has reacted with a mix of uncertainty and cautious optimism. Fans of Rare and other studios are watching closely to see whether the studios will maintain their creative output under new reporting lines.
Microsoft has not yet announced a successor for Duncan or a new chief of staff. The company’s next public update is expected during its upcoming earnings call in July, where it may address the leadership transition and any plans for restructuring.
In summary, XGS is currently operating under a transitional leadership structure with Matt Booty overseeing the studios until a new chief executive is named. The departure of Craig Duncan and Louise O’Connor coincides with a broader reset announced by CEO Asha Sharma, and the possibility of layoffs or a spin‑out remains on the table. The gaming division’s next earnings report and any regulatory filings will likely provide further clarity on the division’s future direction.
