According to AFP, the Microsoft co-founder, 52, will now focus on running the Bill & Melinda Gates Foundation , aimed at fighting disease, reducing poverty, and improving education around the world.
"My life's work really is about software and working with incredible people," Gates told more than 800 Microsoft employees at his onstage farewell chat with chief executive Steve Ballmer at the company's campus in Redmond, Washington.
"There won't be a day in my life that I'm not thinking about Microsoft and the great things it's doing and wanting to help."
Gates was instrumental in Microsoft’s move into the video games business with the original Xbox back in 2001.
The console was revealed at the closing stages of 1999 by Gates himself.
He continued to play a pivotal role in the evolution of Microsoft’s console business, appearing at E3 and speaking to all major press about his new baby, Xbox 360, in 2005.
Gates remains Microsoft's largest single shareholder and chairman of company's board of directors.