Meet Microsoft games chief Phil Spencer, who helped drive $69 billion Activision deal
Phil Spencer, chief executive officer of gaming at Microsoft Corp., center, arrives to court in San Francisco on June 28, 2023.
Shelby Knowles | Bloomberg | Getty Images
When Phil Spencer took the helm of Microsoft’s gaming division in 2014, he and newly appointed CEO Satya Nadella weren’t sure if the company should keep investing in the Xbox, which was losing to Sony.
Less than a decade later, Spencer and the Xbox are at the center of the software company’s largest acquisition ever. With the close of the $69 billion purchase of video game publisher Activision Blizzard on Friday, Microsoft has made clear that gaming is no longer a question mark and is, in fact, central to the company’s future.
“It is an extraordinary amount of money for Microsoft, whose core business is not gaming,” said Don Coyner, who was the first person to work on marketing inside the company’s Xbox unit. Coyner, who left Microsoft in 2018, said he’s confident that smart people at the company can explain the high price.
Spencer’s profile at Microsoft has grown immensely in a short period of time. He told an interviewer from gaming website Shacknews in 2020 that he only got to become head of Microsoft’s gaming division because so many other people had left, and he was still there.
Activision marks one of the priciest deals ever in technology. In addition to the hefty costs, it’s also been extremely time-consuming.
Regulatory pushback from the European Commission, the executive body of the EU, and agencies in the U.S. and U.K. kept the deal at bay for nearly 21 months and forced Microsoft and Activision to extend the deadline to close, which had been mid-July, by three months.
There were numerous moments of uncertainty along the way. In July, Spencer sat in on five days of hearings before a federal judge in San Francisco, who ultimately denied the Federal Trade Commission’s attempt to quash the deal. The FTC took its effort to an appeals court, which refused to grant a motion that would have temporarily stopped the transaction from closing.
Until now, gaming has been a small piece of Microsoft and a relatively slow grower. Revenue increased 1% in the latest quarter, while the company as a whole grew by about 8%. In the most recent fiscal year, gaming revenue was $15.5 billion, accounting for 7.3% of total Microsoft sales.
Rather than ceding the market to Sony and Nintendo, Microsoft’s highest-ranking managers decided to sacrifice most of the software maker’s $111 billion cash pile on a game company.
Bobby Kotick (L), CEO of Activision Blizzard at the Allen & Company Sun Valley Conference on July 11, 2023 in Sun Valley, Idaho.
David A. Grogan | CNBC
Spencer has been vocal in touting Activision’s strengths and was a key force in driving the deal. He’s enjoyed a yearslong relationship with Activision CEO Bobby Kotick, even though the companies have had some tense moments. For example, Microsoft failed to secure the publisher’s titles for the subscription-based Game Pass library during negotiations in 2020.
In November 2021, Spencer approached Kotick and said Microsoft was interested in discussing strategic opportunities between the two companies. His outreach came just three days after The Wall Street Journal reported that Kotick hadn’t told his board what he knew about misconduct inside the company. Activision shares tumbled 11% in the next three trading sessions.
According to a regulatory filing, Spencer asked if Kotick would talk with Nadella, and Kotick agreed. The CEOs spoke the next day, and Nadella conveyed Microsoft’s interest in buying Activision. Some 59 days later the two companies announced their intent to combine.
Microsoft didn’t make Spencer available for an interview.
From intern to boss
Spencer arrived at Microsoft as a software development intern in 1988. Two years later, after graduating from the University of Washington with a bachelor’s degree in technical and scientific communication, he accepted a full-time job at the company as an engineer. He worked on Encarta, Microsoft Money, Microsoft Works and other products.
In the early days of Xbox, Spencer directed an internal game development studio, and in 2008 he took over all of its studios. In 2014, following the launch of the Xbox One console and the appointment of Nadella as CEO, Spencer took charge of Xbox.
Spencer has long understood the importance of top-shelf content. He was instrumental in getting Nadella onboard with the purchase of Minecraft developer Mojang, which Microsoft acquired in 2014 for $2.5 billion. Minecraft has since become the bestselling video game, with more than 300 million copies sold as of this week.
Spencer also took on a big role in the $8.1 billion purchase of ZeniMax Media, the publisher of Doom and Fallout games, in 2021. And at one point he was working on a bid for Warner Bros. Games, whose titles include the Batman: Arkham games, he told two marketing executives in a 2020 email. That deal never materialized.
Spencer and his Microsoft peers then turned to mobile gaming. They considered FarmVille publisher Zynga, Pokemon Go developer Niantic and others before going much bigger with Activision Blizzard.
“Mobile is the largest segment in gaming, with nearly 95% of all players globally enjoying games on mobile,” Microsoft said in its press release announcing the deal. While Activision is known for franchises such as Call of Duty and Overwatch, it also publishes Candy Crush puzzle titles that are among the most popular games on Android and iOS.
Spencer, a lifelong gamer, plays Candy Crush, he said during the July hearings. In total, he plays video games for about 15 hours per week, he told Bloomberg in an interview last year. He’s a fan of Banjo-Kazooie, a game from Microsoft’s Rare studio, and Halo Infinite. In 2021 he played Bungie’s Destiny 2 while another participant streamed the action live on Twitch.
While Microsoft dominates in PC operating systems and productivity software, Xbox remains smaller than Sony in gaming, even after two decades of battle.
“I feel we are in a huge hole with our games lineup both for platform marketing/differentiation and our Gamepass content,” Spencer wrote in a 2022 email to Xbox executives that was made public in the FTC case. This year Xbox has gained a handful of well-received titles, including Zenimax’s Starfield and Forza Motorsport, published by Xbox Game Studios.
Spencer has also recognized some improvements. In 2020, as Sony revealed details of the PlayStation 5, Spencer wrote in a message to Nadella and Microsoft finance chief Amy Hood, “After almost 12 hours of soaking in their unveil, taking apart their specs and looking at the community responses I just wanted to say that I’m proud of our team.” Microsoft had better gaming hardware, software and services, Spencer wrote.
He likes to recognize the achievements of others.
David Hufford, who works in communications and analyst relations at Microsoft, recalled asking Spencer to speak at an event in 2021 honoring the 20th anniversary of the original Xbox launch. Hufford told CNBC in an email that Spencer declined because he wanted to focus on Robbie Bach, who ran entertainment and devices until 2010, and Jeff Henshaw, an Xbox co-founder.
Hufford said that Spencer “preferred we spotlight” those people, “who played more visible leadership roles back then.” Even Bach, once Microsoft’s chief Xbox officer, couldn’t talk Spencer into offering on-stage remarks, Hufford wrote.
WATCH: Microsoft’s $69 billion Activision Blizzard takeover approved by UK
Correction: Gaming revenue increased 1% in the latest quarter, while the company as a whole grew by about 8%. An earlier version misstated a percentage.
Jeff Williams, chief operating officer of Apple Inc., during the Apple Worldwide Developers Conference (WWDC) at Apple Park campus in Cupertino, California, US, on Monday, June 9, 2025.
David Paul Morris | Bloomberg | Getty Images
Apple said on Tuesday that Chief Operating Officer Jeff Williams, a 27-year company veteran, will be retiring later this year.
Current operations leader Sabih Khan will take over much of the COO role later this month, Apple said in a press release. For his remaining time with the comapny, Williams will continue to head up Apple’s design team, Apple Watch, and health initiatives, reporting to CEO Tim Cook.
Williams becomes the latest longtime Apple executive to step down as key employees, who were active in the company’s hyper-growth years, reach retirement age. Williams, 62, previously headed Apple’s formidable operations division, which is in charge of manufacturing millions of complicated devices like iPhones, while keeping costs down.
He also led important teams inside Apple, including the company’s fabled industrial design team, after longtime leader Jony Ive retired in 2019. When Williams retires, Apple’s design team will report to CEO Tim Cook, Apple said.
“He’s helped to create one of the most respected global supply chains in the world; launched Apple Watch and overseen its development; architected Apple’s health strategy; and led our world class team of designers with great wisdom, heart, and dedication,” Cook said in the statement.
Williams said he plans to spend more time with friends and family.
“June marked my 27th anniversary with Apple, and my 40th in the industry,” Williams said in the release.
Williams is leaving Apple at a time when its famous supply chain is under significant pressure, as the U.S. imposes tariffs on many of the countries where Apple sources its devices, and White House officials publicly pressure Apple to move more production to the U.S.
Khan was added to Apple’s executive team in 2019, taking an executive vice president title. Apple said on Tuesday that he will lead supply chain, product quality, planning, procurement, and fulfillment at Apple.
The operations leader joined Apple’s procurement group in 1995, and before that worked as an engineer and technical leader at GE Plastics. He has a bachelor’s degree from Tufts University and a master’s degree in mechanical engineering from Rensselaer Polytechnic Institute in upstate New York.
Khan has worked closely with Cook. Once, during a meeting when Cook said that a manufacturing problem was “really bad,” Khan stood up and drove to the airport, and immediately booked a flight to China to fix it, according to an anecdote published in Fortune.
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Elon Musk, chief executive officer of SpaceX and Tesla, attends the Viva Technology conference at the Porte de Versailles exhibition center in Paris, June 16, 2023.
Gonzalo Fuentes | Reuters
Tesla CEO Elon Musk told Wedbush Securities’ Dan Ives to “Shut up” on Tuesday after the analyst offered three recommendations to the electric vehicle company’s board in a post on X.
Ives has been one of the most bullish Tesla observers on Wall Street. With a $500 price target on the stock, he has the highest projection of any analyst tracked by FactSet.
But on Tuesday, Ives took to X with critical remarks about Musk’s political activity after the world’s richest person said over the weekend that he was creating a new political party called the America Party to challenge Republican candidates who voted for the spending bill that was backed by President Donald Trump.
Ives’ post followed a nearly 7% slide in Tesla’s stock Monday, which wiped out $68 billion in market cap. Ives called for Tesla’s board to create a new pay package for Musk that would get him 25% voting control and clear a path to merge with xAI, establish “guardrails” for how much time Musk has to spend at Tesla, and provide “oversight on political endeavors.”
Ives published a lengthier note with other analysts from his firm headlined, “The Tesla board MUST Act and Create Ground Rules For Musk; Soap Opera Must End.” The analysts said that Musk’s launching of a new political party created a “tipping point in the Tesla story,” necessitating action by the company’s board to rein in the CEO.
Still, Wedbush maintained its price target and its buy recommendation on the stock.
“Shut up, Dan,” Musk wrote in response on X, even though the first suggestion would hand the CEO the voting control he has long sought at Tesla.
In an email to CNBC, Ives wrote, “Elon has his opinion and I get it, but we stand by what the right course of action is for the Board.”
Musk’s historic 2018 CEO pay package, which had been worth around $56 billion and has since gone up in value, was voided last year by the Delaware Court of Chancery. Judge Kathaleen McCormick ruled that Tesla’s board members had lacked independence from Musk and failed to properly negotiate at arm’s length with the CEO.
Tesla has appealed that case to the Delaware state Supreme Court and is trying to determine what Musk’s next pay package should entail.
Ives isn’t the only Tesla bull to criticize Musk’s continued political activism.
Analysts at William Blair downgraded the stock to the equivalent of a hold from a buy on Monday, because of Musk’s political plans and rhetoric as well as the negative impacts that the spending bill passed by Congress could have on Tesla’s margins and EV sales.
“We expect that investors are growing tired of the distraction at a point when the business needs Musk’s attention the most and only see downside from his dip back into politics,” the analysts wrote. “We would prefer this effort to be channeled towards the robotaxi rollout at this critical juncture.”
Trump supporter James Fishback, CEO of hedge fund Azoria Partners, said Saturday that his firm postponed the listing of an exchange-traded fund, the Azoria Tesla Convexity ETF, that would invest in the EV company’s shares and options. He began his post on X saying, “Elon has gone too far.”
“I encourage the Board to meet immediately and ask Elon to clarify his political ambitions and evaluate whether they are compatible with his full-time obligations to Tesla as CEO,” Fishback wrote.
Musk said Saturday that he has formed the America Party, which he claimed will give Americans “back your freedom.” He hasn’t shared formal details, including where the party may be registered, how much funding he will provide for it and which candidates he will back.
Tesla’s stock is now down about 25% this year, badly underperforming U.S. indexes and by far the worst performance among tech’s megacaps.
Musk spent much of the first half of the year working with the Trump administration and leading an effort to massively downsize the federal government. His official work with the administration wrapped up at the end of May, and his exit preceded a public spat between Musk and Trump over the spending bill and other matters.
Musk, Tesla’s board chair Robyn Denholm and investor relations representative Travis Axelrod didn’t immediately respond to requests for comment.
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