Phil Spencer, the executive who has managed Microsoft Studios since 2008, has been promoted to head of Xbox.
"I will now be leading the Xbox, Xbox Live, and creative teams including Xbox Music, Xbox Video and Microsoft Studios as we deliver the next generation of games and entertainment," Spencer said.
The experienced games development exec is considered a direct replacement to Don Mattrick, who announced his departure from Microsoft in July.
Spencer has recently taken part in high profile one-on-one interviews with the press.
His promotion comes amid a wider shake-up of the Microsoft business, revealed on Monday by Microsoft's new chief executive Satya Nadella.
The key change to the Xbox division is that its separate teams will be brought closer together with Spencer at the helm of each.
His new role, as stated by Nadella, "combines the Xbox and Xbox Live development teams with the Microsoft Studios team".
"Gaming will be our core as we take Xbox forward"
Spencer added: "Combining these teams will strengthen the connection between some of the world's most innovative creators and those building the Xbox itself.
"It's been a remarkable year for Xbox and I am honored to lead the team at this incredible time for Microsoft and the games industry."
Spencer's promotion comes weeks after Xbox chief product officer Marc Whitten departed from the company.
Along with the promotion of Spencer, former Nokia chief executive Stephen Elop will stand as executive VP of Microsoft Devices Group.
Yet Spencer will not report to Elop, who is rumoured to have questioned the value of console games business. He will instead report to Terry Myerson, executive VP of operating systems.
In a statement which could be read as a deliberate move away from Xbox's recent 'all-in-one entertainment' strategy, Spencer said "games and gamers have always been at the core of Xbox and the core of my work-and gaming will be our core as we take Xbox forward".
He added: "This past year has been a growth experience both for me and for the entire Xbox team. We've taken feedback, made our products better and renewed our focus on what is most important, our customer.
"Our mission is to build a world-class team, work hard to meet the high expectations of a passionate fan base, create the best games and entertainment and drive technical innovation. As we continue forward, this renewed focus and mission will be a foundational part of how I lead the Xbox program."