In the new role, Spencer will oversee the designers behind the Xbox One video game console, its Xbox Live interface, as well as the teams behind Xbox Music and Xbox Video, while continuing to manage Microsoft's in-house gamemakers, behind franchises like "Halo."
In making the announcement, Microsoft CEO Satya Nadella said the move is meant to allow the company to "keep gaming close to the group developing operating systems across devices."
Spencer reports to Terry Myerson, Microsoft's executive VP of operating systems. He replaces Don Mattrick, he left Xbox, after shepherding the development of the Xbox One console, for social and mobile gamemaker Zynga. More recently, the company recently lost Marc Whitten, who oversaw the development of Xbox Live.
"Combining all our software, gaming and content assets across the Xbox team under a single leader and aligning with the OSG team will help ensure we continue to do great work across the Xbox business, and bring more of the magic of Xbox to all form factors, including tablets, PCs and phones," Nadella added in a blog post on Monday.
Spencer will work closely with Yusuf Mehdi, who leads business strategy and marketing for Xbox, George Peckham, who heads up third-party partnerships and Mike Angiulo, who will continue leading Xbox hardware.
In addition to "Halo," Microsoft Game Studios has produced franchises like "Gears of War," "Kinect Sports," "Fable" and "Forza Motorsport," and helped launch Xbox Entertainment Studios, which is developing a slate of original series for the Xbox Live platform under former CBS exec Nancy Tellem, and was instrumental in brokering a partnership with the NFL.
In the blog post, Nadella said "Phil is the right person to lead Xbox forward," and issued a quick "go, "Titanfall!" after saying how he loves "the way the Xbox team is focused on great games and gaming experiences," referencing the latest blockbuster title to hit the console.
In addition to Spencer's new role, Nadella also promoted Scott Guthrie to executive VP of Microsoft's Cloud and Enterprise group. He already had spent the past two months leading the company's infrastructure business. He first joined the company in 1997.
Nokia CEO Stephen Elop also joins Microsoft as executive VP, Microsoft Devices Group, reporting directly to Nadella.
Microsoft expects to complete its acquisition of Nokia's hardware biz in April. Elop will work with Spencer and Myerson on Xbox to develop new opportunities to expand Xbox Live's mobile capabilities.
Nadella sent the email to all of Microsoft's employees under the subject line, "Tuning our organization."
"Recently, I've discussed with the Microsoft leadership team the need to zero in on what truly makes Microsoft unique," Nadella said. "As I said on my first day, we need to do everything possible to thrive in a mobile-first, cloud-first world."
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