Xbox is setting up a new team to study the wave of decompiled, recompiled and remixed games that fans have been building, many of them with help from AI models. Xbox CEO Asha Sharma announced Xbox Labs in a memo to staff on Tuesday. The Verge published the memo in full.
Sharma 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.” GeekWire reports that Scott Van Vliet, Xbox’s chief technology officer since May, will lead the group. “We’ll build in the open, learn from what people do, and measure success by whether more people are playing and creating,” Sharma wrote.
What sparked it
The memo points to things fans have done in recent weeks. Sharma wrote that games have been “rapidly decompiled and rebuilt to run on hardware they were never originally designed to support.” She also noted that Windows PC builds have been translated to run on Apple Silicon or ported to run in a browser through WebAssembly and WebGPU. In addition, she wrote, some of the biggest games in the world have been “remixed into the source code of another.” The Verge points to skateboarding modded into Call of Duty and Halo running in a web browser as examples Microsoft has seen.
Sharma wrote that these experiments “challenge long-held assumptions about our industry: the tether between software and hardware, the boundary between creation and play, and how people discover and experience games.” She was also unusually blunt about what that means for Xbox’s business. “These are unmistakably good outcomes for players, even when (and sometimes because) they challenge our existing business models,” she wrote.
Agents, and a big number
GeekWire notes that the memo never actually uses the term AI, but it does frame part of the effort around AI agents. “Coding became the first major workload for agents because they can write, run, and test software,” Sharma wrote. “Games share many of those same properties, and people spend more than 72 billion hours a year playing XBOX games, roughly five times the estimated time spent writing code worldwide.” She added that Xbox will share the tools it builds with developers across the industry.
Sharma also wrote that Xbox’s priorities “aren’t changing.” She listed a commitment to making great games, to Xbox hardware and to “being responsible stewards of IP and the communities built around it.” She described Labs as “a way to explore new technology without abandoning the work already underway.”
That line about IP is where the open question sits. The Verge reports that it asked Microsoft how it will handle unauthorized use of its IP in decompiles and recompiles, and the company didn’t respond in time for publication.
The memo arrives during a turbulent stretch for Xbox. Microsoft cut 268 roles in Xbox Game Studios last month, and earlier on Tuesday Sharma reportedly told staff that Xbox won’t survive by reliving its past.
