Two top executives in Microsoft’s Entertainment and Device division are leaving the company in a shakeup of the unit’s mobile and gaming segments, which are comprised of the Xbox, Zune and Windows Mobile platforms.

The change comes as Microsoft’s Windows Mobile operating system struggles to compete with Apple’s iPhone and Google’s Android operating system, which recently beat Windows Mobile in terms of global market share according to Gartner estimates.

Robbie Bach, a 22-year Microsoft veteran who headed the company’s Entertainment and Devices unit since its formation in 2005, is retiring from Microsoft this fall “to dedicate more time to my family and my nonprofit work.”

Bach’s position will not be replaced. Instead, current Xbox head Don Mattrick and Windows Mobile leader Andy Lees will report directly to Microsoft CEO Steve Ballmer beginning July 1.

Microsoft also the division’s design and development officer was leaving the company for unspecified reasons.  J Allard was a 19-year Microsoft veteran who oversaw the development of the Xbox, Zune and the recently-launched Kin handset. Allard will maintain a role as an advisor to Ballmer.