Microsoft has made some moves to ensure the future of games on its Xbox and HoloLens platforms.

John Needham has left his position as the head of Fable developer Lionhead Studios to oversee the development of Microsoft’s games for Xbox and HoloLens (as Engadget first spotted), the head-mounted augmented reality device the company revealed in January (read more about it here). This confirms that Microsoft is moving ahead with software for HoloLens, which is Microsoft’s answer to the virtual reality craze that companies like Oculus VR, Sony, and Valve have stirred up with their respective head-mounted displays.

While HoloLens isn’t a VR device, it is capable of some of the same kinds of tricks as Oculus Rift or the PlayStation Morpheus. Microsoft has already shown off some concepts — like a game of Minecraft that takes place all around your living room — that look exciting and promising. So promising that market-advisory group Digi-Capital expects that augmented- and virtual-reality hardware and software could make as much as $150 billion in revenues by 2020.

This is important for Microsoft since HoloLens could help differentiate its gaming products over the next few years. Right now, gamers and developers are buzzing about the possibility for virtual reality. And various companies are rushing into that space. While Oculus (which Facebook owns), Valve (which is working with partners like HTC), and Sony (which will only have a VR device for its PlayStation 4) are the big names, smaller companies have already started flooding that market with cheap knockoffs. HoloLens is different from all that, and it has the benefit of running on a familiar platform like Windows. If Microsoft can deliver the games for it, HoloLens could potentially swoop in and steal some of VR’s momentum.

As the new HoloLens boss, Needham works under Kinect mastermind Kudo Tsunoda, who is now the head of Microsoft Studios’ entire portfolio of games (not including Halo, Gears of War, or Forza, which have their own dedicated teams).

“Kudo Tsunoda will lead the vision and experience development of our other Microsoft Studios portfolio investments in the United States, Europe, and across our global publishing team,” reads a Microsoft statement. “John Needham relocated to [Microsoft headquarters in] Redmond in a new role overseeing internal development for several games and experiences for both Xbox and Microsoft HoloLens reporting to Kudo. All [other] responsibility for Xbox [in Europe, Middle-East, and Asia] will be overseen directly by [Xbox boss] Phil Spencer.”

This comes after Microsoft confirmed that Phil Harrison, its Xbox boss in Europe, has left to form his own startup. That company, called Alloy Platform Industries, is using some top-secret Microsoft tech to produce a product for the consumer space.

This further cements the current Xbox leadership at Microsoft as Spencer’s team. He took over that position from former Xbox and Zynga boss Don Mattrick back in 2013, and Spencer has spent much of his time since rehabilitating the Microsoft image in the gaming space after several blunders regarding digital-rights management, the prohibition of used games, and an always-online connection for the Xbox One. Spencer turned all of that around — in what is known as the “Xbox One-80″ — and gamers have mostly forgotten those perceived transgressions against them.

Now, with Tsunoda and Needham in the top positions, it seems like Spencer is ready to charge ahead and own his era of Xbox.

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