Xbox Labs (styled XBOX LABS) is a small team inside XBOX, Microsoft's gaming business, formed in October 2026 to experiment with new technology for making, porting and playing video games. XBOX CEO Asha Sharma announced the group on 13 October 2026 in a memo to employees that Microsoft also published on Xbox Wire, and chief technology officer Scott Van Vliet leads it.[1][2] Sharma presented the team as a response to recent projects in which games were decompiled and rebuilt for other hardware or for web browsers. Press coverage tied those projects to AI coding tools, although the memo itself never uses the word "AI".[2][3][4]

Announcement

Xbox Wire published the memo under the title "Introducing XBOX LABS", noting that it had just been sent to Team XBOX employees worldwide.[1] Sharma posted the same note on X that day, linking to the group's website, labs.xbox.com.[5]

The memo opens with the developments that prompted the group. Sharma wrote that "in recent weeks, we've seen games rapidly decompiled and rebuilt to run on hardware they were never originally designed to support", that Windows PC builds had been translated to run on Apple Silicon or ported to run in a browser through WebAssembly and WebGPU, and that "many of the biggest games in the world" had been "remixed into the source code of another".[1] She said these experiments challenge "the tether between software and hardware, the boundary between creation and play, and how people discover and experience games", and called easier access to games, new life for old games and more players becoming creators "unmistakably good outcomes for players, even when (and sometimes because) they challenge our existing business models."[1]

Mandate

The memo describes Xbox Labs as "a small group of game makers, engineers and scientists whose job is to turn emerging ideas into things our players and developers can experience." According to Sharma, the team will "build in the open, learn from what people do, and measure success by whether more people are playing and creating."[1]

One passage of the memo concerns agents. Sharma wrote that "coding became the first major workload for agents because they can write, run, and test software" and that games "share many of those same properties". She added that people spend more than 72 billion hours a year playing XBOX games, which she put at roughly five times the estimated time spent writing code worldwide, and said XBOX would share the tools it builds with developers across the industry.[1] GeekWire noted that the memo frames the effort partly around AI agents without using the term AI.[2]

Sharma also wrote that XBOX's priorities were not changing, citing its commitment to the "4Cs", to making games, to its hardware and to being "responsible stewards of IP and the communities built around it". The Xbox Wire version calls Labs "a way to explore new technology without abandoning the work already underway"; the version Sharma posted on X describes new technology "that is game design led".[1][5]

Leadership

Sharma's memo refers to the group's leader only as "Scott". GeekWire and Kotaku identified him as Scott Van Vliet, XBOX's chief technology officer.[2][4] Van Vliet was named CTO in May 2026, at the same time as Matthew Ball became chief strategy officer. Before joining XBOX he led Azure OpenAI and AI Core infrastructure at Microsoft; he has also led Microsoft Teams engineering. His games background includes work at Amazon on Minecraft: Fire TV Edition, plus earlier roles at Mattel.[6]

Sharma became Executive Vice President and CEO of Microsoft Gaming in a change Microsoft announced on 20 February 2026, after Phil Spencer decided to retire. Microsoft Gaming has been known as XBOX since 23 April 2026, and Sharma's title is now CEO XBOX.[7] Before taking the role she was President of Product for Microsoft's AI tools and application infrastructure, spanning Azure, GitHub and Visual Studio Code.[8] In her first message as CEO she wrote that XBOX would not "flood our ecosystem with soulless AI slop" and that games would be "crafted by humans".[7]

Website

The Labs site at labs.xbox.com carries the tagline "Let's play with what's next" and the description "Explore, experiment, and create what's next in play."[9] Shacknews reported on launch day that the site let visitors register an email address for updates.[10] As of 15 October 2026 the site offered:

Feature	Description
Email sign-up	A form for news and offers about Xbox Labs from Microsoft, asking for an email address, country and date of birth
Clip player	A retro, terminal-style interface labelled "LABS.EXE v0.1.0" that plays game clips, the first labelled Gears of War: E-Day
"ASCII machine"	A feature that takes a video file from the visitor and renders it as text characters; the page says the processing happens locally and nothing is uploaded

As of that date the page listed no products, tools or release dates.[9]

Context and reception

The Verge's Tom Warren described the announcement as Microsoft "officially embracing the chaos of this new AI-powered era of game modding", writing that many of the decompilation and recompilation projects "use AI models to help modders remix games". He cited skateboarding being modded into Call of Duty and Halo being played in a web browser as examples, and compared the projects with Microsoft's own Xbox backward compatibility program. Warren asked Microsoft about unauthorized use of its intellectual property; the company did not respond before publication.[3]

Kotaku's Ethan Gach called Xbox Labs "a big announcement about AI that's missing the word AI". He pointed out that the memo's passive phrasing ("have been translated", "have been remixed") does not say who did the work or with what tools, and answered that it was people using AI models such as Claude Opus 5.5.[4] Shacknews likewise described the projects as mods that use AI coding to make games playable in browsers or to combine existing games.[10]

GeekWire placed the launch alongside Sharma's earlier decisions on AI and on XBOX's finances. In May 2026 she withdrew Gaming Copilot from mobile and canceled its console launch. A reset she announced in July called for about 3,200 job cuts by the end of the fiscal year, roughly 20% of the XBOX workforce, and in September Microsoft cut 268 roles in Xbox Game Studios.[2]

References

Sharma, Asha (posted by Mike Nelson). "Introducing XBOX LABS". Xbox Wire, 13 October 2026.
Bishop, Todd. "Microsoft forms 'Xbox Labs' to explore game remixes, ports and other new frontiers". GeekWire, 13 October 2026.
Warren, Tom. "Xbox is officially embracing the chaos of AI-powered game ports". The Verge, 13 October 2026.
Gach, Ethan. "Xbox Labs Is A Big Announcement About AI That's Missing The Word AI". Kotaku, 13 October 2026.
Sharma, Asha (@asha_shar). "Today we're standing up XBOX LABS". X, 13 October 2026.
"Xbox hires Matthew Ball and Scott Van Vliet in leadership team expansion". PocketGamer.biz, 21 May 2026.
Nadella, Satya, et al. "Asha Sharma named EVP and CEO, Microsoft Gaming". The Official Microsoft Blog, 20 February 2026 (editor's note added after 23 April 2026).
"Asha Sharma". Xbox Wire leadership biography. Retrieved 15 October 2026.
"XBOX Labs | Let's play with what's next". Xbox Labs official website. Retrieved 15 October 2026.
Erskine, Donovan. "Xbox Labs is the company's response to recent game mods and decompilations". Shacknews, 13 October 2026.

Editing: Xbox Labs