Xbox CEO Asha Sharma kills Copilot for Gaming — overhauls leadership with CoreAI veterans

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Xbox seeks to reverse a revenue slump.

An image of Minecraft with Xbox's Copilot for Gaming overlaid. An AI assistant explains through text how to use Minecraft's crafting feature.
(Image credit: Microsoft)

Xbox CEO Asha Sharma announced on X on Tuesday that the company is winding down its Copilot for Gaming feature on mobile and canceling its planned console launch.

Sharma also unveiled a broad leadership overhaul, bringing in four senior executives from her former CoreAI engineering group at Microsoft, according to an internal memo reported by CNBC. Sharma called the Copilot pullback part of a push to "retire features that don't align with where we're headed."

Microsoft first unveiled Copilot for Gaming at GDC in March 2025, positioning the AI assistant as a real-time sidekick that offers gameplay tips, coaching, and session recaps. A beta rolled out to the Xbox mobile app, then expanded to the PC Game Bar in September, and the ROG Xbox Ally handheld. Then came a privacy backlash in October after a user discovered that it was sending screen-activity data to Microsoft's servers by default.

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Sharma hasn’t addressed the status of Gaming Copilot on the PC Game Bar or the ROG Xbox Ally handheld, leaving the future of those versions unclear. In the memo, Sharma wrote that Xbox needs to "evolve how we work" and acknowledged the division spends "too much time inward instead of with the community."

She appointed four executives from CoreAI: Jared Palmer, formerly VP of product at CoreAI and a senior VP at GitHub, will serve as VP of engineering and technical advisor to Sharma; Tim Allen, previously CoreAI's VP of design, becomes head of Xbox design; Jonathan McKay, who held growth roles at OpenAI and Meta before leading CoreAI growth, takes on the same function at Xbox; and Evan Chaki, a CoreAI general manager, will lead a new team focused on simplifying development workflows. A fifth hire, David Schloss, joins from Instacart to oversee Xbox's subscription and cloud business.

Two senior Xbox executives are departing. Kevin Gammill, corporate VP of gaming ecosystem organization, is leaving the company. Roanne Sones, corporate VP of Xbox devices and ecosystem, will take a leave of absence after the summer, then transition to an advisory role.

Sharma took over as Xbox CEO in February after Phil Spencer retired following 38 years at Microsoft. Since then, she has axed the "This is an Xbox" marketing campaign, cut Game Pass prices, rebranded Microsoft Gaming back to simply Xbox, and outlined a back-to-basics strategy focused on console and community. The leadership changes arrive as Xbox continues to struggle financially: gaming revenue fell to $5.3 billion in the most recent quarter, down from $5.7 billion a year earlier, and hardware revenue dropped 33%.

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Luke James
Luke James
Contributor

Luke James is a freelance writer and journalist.  Although his background is in legal, he has a personal interest in all things tech, especially hardware and microelectronics, and anything regulatory. 

9 Comments Comment from the forums
  • ezst036
    Admin said:
    Xbox CEO Asha Sharma announced on X on Tuesday that the company is winding down its Copilot for Gaming feature on mobile and canceling its planned console launch.
    It is very impressive that they cut off Copilot Clippy for gaming. It wasn't all that long ago that Nadella said of Microsoft that "We are the Copilot company". So this cut off is not insignificant in that light.

    Microsoft appears to genuinely taking the threat seriously from the growing Linux market with SteamOS. At least, Sharma is leading that way. Maybe they have a winner on their hands after all.
    Reply
  • DS426
    ezst036 said:
    It is very impressive that they cut off Copilot Clippy for gaming. It wasn't all that long ago that Nadella said of Microsoft that "We are the Copilot company". So this cut off is not insignificant in that light.

    Microsoft appears to genuinely taking the threat seriously from the growing Linux market with SteamOS. At least, Sharma is leading that way. Maybe they have a winner on their hands after all.
    Phil was a bit of tool, so his retirement is a boon in itself. He sealed his legacy.
    Reply
  • giorgiog
    I mean jacking up prices of Game Pass so much so their cancellation page started crashing...maybe they aren't making the best decisions.
    Reply
  • Air2004
    "Tim Allen, previously CoreAI's VP of design, becomes head of Xbox design;"

    Am I the only one who thought of the comedian when I read that name ?

    Any how, the rebrand will be called Cortana's CoreAi Copilot Clippy.    4C for short.
    Reply
  • usertests
    giorgiog said:
    I mean jacking up prices of Game Pass so much so their cancellation page started crashing...maybe they aren't making the best decisions.
    Asha Sharma cut the Game Pass price, it's in the article.

    We'll see if it lasts though. It may be a non-viable business model.
    Reply
  • TerryLaze
    usertests said:
    We'll see if it lasts though. It may be a non-viable business model.
    It has to be viable, otherwise they are in big trouble with the FCC.

    Also they just have to outlast sony and sony is in trouble right now, they had heavy losses in net income and their shares dropped like stone, their combined assets dropped to half.
    Needing all that ram and ssd for the PS5 isn't fun for them, while MS is shifting heavily towards software and making that available on as many storefronts as possible, the next xbox might just be a paper launch or an extremely small run, it's not like they had big sales anyway.
    Reply
  • bigdragon
    Asha has been making a lot of surprisingly good moves and decisions. I'm concerned bringing more AI people into XBox leadership is a mistake, but I'm hopeful some of them are gamers. Gaming is something you're supposed to leave behind / grow out of well before you enter the executive space though, so my expectations are low. I know I've been told not being a morning person and being into "childish things" is apparently holding me back. >_<

    Announcing an XBox 720 and advertising it as a 360 * 2 (that equals 720) could get a lot of people really excited especially if there's a new Halo that's done right. XBox could come back in a strong way if they focus on their franchises, limit their budgets and team sizes, and don't throw away money like Sony's pursuit of live services.
    Reply
  • usertests
    bigdragon said:
    Announcing an XBox 720 and advertising it as a 360 * 2 (that equals 720) could get a lot of people really excited especially if there's a new Halo that's done right.
    That would be really funny but it risks an association with 720p resolution, when it will be closer to 4K120 gaming.
    Reply
  • bigdragon
    usertests said:
    That would be really funny but it risks an association with 720p resolution, when it will be closer to 4K120 gaming.
    True! I think there's so few displays and so little marketing for 720p products that it's probably not an issue these days. Having that 720 name would also generate quite a bit of free advertising from publications and gamers eager to explain the number. This strategy does fall apart if a bunch of 360-era franchises don't get sequels with or shortly after the console's launch.
    Reply