Kim, who headed up the studio for four years, will be replaced by Phil Spencer, who formerly headed up the Microsoft Game Studios in Europe.

“We’re strategically positioning the leadership team to drive every aspect of the Xbox business to new heights,” said Don Mattrick, senior vice president of the Interactive Entertainment Business. “I firmly believe that Microsoft will lead the next great innovations in games and entertainment. Today’s organizational announcements align us to accelerate this expansive growth.”

Microsoft has not yet found a replacement for Bell who is said to be leaving to "pursue other opportunities outside of Microsoft."

“The time is right for me to pursue my life’s passion of consumer brand marketing and the creative and services that drive it.” Bell said “Coming from automotive, and now technology and entertainment, I am excited to expand to new industries and categories.”

Hit the jump for the full release and more Mattrick-y quotes.

Interactive Entertainment Business Leadership Team Positioned to Drive Next Wave of Growth and Audience Expansion
Microsoft announces new leadership roles for Shane Kim and Phil Spencer and the departure of Jeff Bell.

REDMOND, Wash. — June 12, 2008 — Microsoft Corp. today announced a new leadership structure in its Interactive Entertainment Business, assembled to align with future business development opportunities.
Shane Kim will assume the role of corporate vice president of Strategy and Business Development, a newly established role in Microsoft’s Interactive Entertainment Business. In addition, Phil Spencer, a Microsoft Game Studios veteran for six years, will assume leadership of all first-party development and publishing efforts worldwide. Both leaders will report directly to Don Mattrick, senior vice president of the Interactive Entertainment Business.
After spending four and a half years leading the transformation of Microsoft Game Studios into a world-class entertainment publisher, Kim will now explore new growth opportunities with partners across all parts of the global Interactive Entertainment Business. His focus will be on future external relationships and partnerships, as well as developing growth strategies for the entire business.
Formerly the general manager of Microsoft Game Studios Europe, Spencer will return to Redmond from the U.K.to take on his new role as general manager of the global Microsoft Game Studios business. Spencer will oversee the creation of new, unannounced franchises that aim to attract new audiences. His teams will foster some of today’s most beloved entertainment franchises, including “Halo,” “Gears of War” and “Fable,” by continuing to partner with the industry’s best developers to deliver the best games for the Windows and Xbox platforms.
“We’re strategically positioning the leadership team to drive every aspect of the Xbox business to new heights,” Mattrick said. “I firmly believe that Microsoft will lead the next great innovations in games and entertainment. Today’s organizational announcements align us to accelerate this expansive growth.”
After two years of driving a cultural change in the way Microsoft markets its entertainment brands, Jeff Bell, current corporate vice president of Global Marketing for Microsoft’s Interactive Entertainment Business, has decided to pursue other opportunities outside Microsoft. Bell will remain at Microsoft through the summer, working with Mattrick to ensure a smooth transition of his responsibilities. In the interim while Microsoft searches for Bell’s replacement, Matt Barlow, Charlotte Stuyvenberg and Jim Merrick, all day-to-day product marketing and marketing communications leaders in the Interactive Entertainment Business, will carry forward global marketing initiatives for the business group.
“The time is right for me to pursue my life’s passion of consumer brand marketing and the creative and services that drive it.” Bell said “Coming from automotive, and now technology and entertainment, I am excited to expand to new industries and categories.”
“We thank Jeff for his achievements and contributions to Microsoft and the Xbox business. His innovative marketing programs included award-winning Xbox brand marketing campaigns, as well as world-renowned creative for ‘Gears of War’ and ‘Halo 3,’” Mattrick said. “We wish Jeff nothing but the best in his future endeavors.”

The concept, captured in blurry pics later that year, would allow gamers to access Live via a cellphone so they could check friend status, Achievements, all the data of Live, on the go.

Bell said not to give up hope. "Live anywhere is not abandoned, it's just not easy to do."

And then he never mentioned it again.

After walking the audience through his personal gaming history, which started with Pong in his early teens, Bell talked about gaming generations and how Microsoft works to extend their reach in the industry, reminding the audience that the Xbox is still the new guy in the console wars.

"We are the challenger brand in this category, this is our seventh year really," he said. "We're coming into our eighth holiday, from that stand point we are still the newbie."

Microsoft's plan to extend their reach includes courting large cross-platform titles, key categories and new types of gaming.

"We do wish to win critical cross-platform blockbusters," Bell said. "It's our vision to move away from just first-party...we also need to change the paradigm of how we partner with our third parties."

Microsoft also want to grow what they call key categories: sports, driving, family and innovative gaming.

"We must continue to be inspired by new types of game play," he said, pointing to Nintendo's upcoming release of Wii Fit. "We don't have the Wii Fit but we are happy to have the relationship with Konami on DDR. We are an also-ran compared to the Wii Fit, but we're not going to just say well done you deserve it."

"We are all looking for the twister of the 21 century."

We very much are positioning ourselves to be the choice console of this generation, much like the PS2 was in the last generation.

But what about the Wii, you say?

We think that we could live very, very well in the same household as the Wii, and we're trying to make sure that when there is that choice for a second console that it is the Xbox 360. I do think that Nintendo has flipped and has become the first console for this generation for a lot of families who did have a console history. What I still don't know is how many absolute new households have been brought in because of the Wii...We're positioning ourselves to be ready if, in fact, gamers find they're ready to graduate from a certain experience potentially with the Wii, either because it's limited on the type of gameplay that's available or the technology in that box.

Here's the issue: by current sales trends, the Wii looks like the new PS2 at the moment. And with the current price of consoles, even with a growing market, it's hard to imagine two home systems moving 100,000,000 units—especially when the portable market is exploding. Sloppy seconds might give you a chance to make out with the head cheerleader, but they can also increase your risk of oral herpes.

But you know the drill. The comments are your flame whore.

Sitting Down with Microsoft's Jeff Bell [1UP via MCV]

The continued problems were a result of not simply too many people trying to connect and play on Live, but also that too few Xbox Live team members were in the office to react. "It's easy when we're all the office in November, but on December 25th, it's harder to get a hold of everybody," Penello said, later adding "I hope people feel like [giving away a free Live Arcade game] is a fair make good for the inconvenience."

Penello also came to the Live team's defense, noting that "I'd also say in seven years, this has happened maybe zero other times, but I can't remember a time when, other than the slow downloads we had when we launched Video Marketplace, we have had a service outage that wasn't planned."

While Microsoft's Penello and Jeff Bell gave us the impression that the problem is largely addressed when we asked at CES, some of us at Kotaku are still having connection issues, specifically gamertag recovery unresponsiveness. Unfortunately, I'm away from my Xbox 360 and can't report on my own successes or failures with the service. We've heard fewer complaints from readers over the past few days, but still want to hear from you if you're having troubles.

Lets be honest. There's only two major franchises that are talked about not appearing on our platform: Final Fantasy and Metal Gear Solid.

That's the thing. Hopefully we're at the tipping point right now, where people will work with you and say, "We're going to make money the old fashioned way". Clearly there is a content and development necessity when you're the new kid. We're seeing that change over now when we have the install base and we will continue on our commitment to growth.