Xbox chief executive Asha Sharma said on 13 October 2026 that Microsoft is “standing up XBOX LABS”, a new group set up to experiment with the wave of decompiled, rebuilt and ported games that has spread in recent weeks, many of them made with help from AI tools. She announced it on X, posting the full memo she sent to Xbox staff.
What prompted it
In her memo, Sharma wrote: “In recent weeks, we’ve seen games rapidly decompiled and rebuilt to run on hardware they were never originally designed to support. Windows PC builds have been translated to run on Apple Silicon or ported to run inside a browser through WebAssembly and WebGPU.”
Decompiling means turning a finished game back into code people can read and change. Once that is done, the game can be rebuilt for a different machine, such as a Mac or a web browser. The Verge’s Tom Warren reported that Microsoft has seen skateboarding modded into Call of Duty and Halo played in a web browser, and that many of these mods use AI models.
Sharma said these experiments “challenge long-held assumptions about our industry” and called the results “unmistakably good outcomes for players, even when (and sometimes because) they challenge our existing business models.”
What Xbox Labs is
According to the memo, Xbox Labs is “a small group of game makers, engineers and scientists whose job is to turn emerging ideas into things our players and developers can experience.” Sharma added: “We’ll build in the open, learn from what people do, and measure success by whether more people are playing and creating.”
The memo says Sharma asked “Scott” to set it up. Scott Van Vliet confirmed in his own X post that he is leading it: “I’m excited to lead this group and to share our experiments with you soon.” A new site at labs.xbox.com so far carries only the line “Let’s play with what’s next.” and an email sign-up.
The AI agents angle
Sharma tied the lab directly to AI agents. “Coding became the first major workload for agents because they can write, run, and test software,” she 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.” The 72 billion hours figure, and the comparison with coding, are Sharma’s own estimates; the memo does not say how they were worked out.
She also said Xbox will “share the tools we build with developers across the industry, just as we always have.”
The question of IP
Many of these ports and mods use games that modders do not own. Sharma’s memo says Xbox remains committed to “being responsible stewards of IP and the communities built around it”, but it does not say how Microsoft will treat unauthorised ports of its own games. The Verge said it asked Microsoft about unauthorised IP use and that the company “didn’t respond in time for publication.”
What was not announced
Xbox did not announce any products, release dates, budget or headcount for Xbox Labs. Windows Central’s Jez Corden noted it remains unclear when the lab’s first work will reach players or developers.
What this means
- Xbox is engaging with modders rather than only fighting them. The memo treats AI-assisted ports as an opportunity, at least for now.
- Agents are the bet. Sharma is pitching games as the next big job for AI agents after coding.
- Details are still to come. For now this is a team and a memo, with no products or timeline.
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Sources
- Asha Sharma (@asha_shar) on X, 13 October 2026. https://x.com/asha_shar/status/2110083127741702241
- Scott Van Vliet (@scottvanvliet) on X, 13 October 2026. https://x.com/scottvanvliet/status/2110084457919398195
- Xbox Labs. https://labs.xbox.com/
- The Verge (Tom Warren), “Xbox is officially embracing the chaos of AI-powered game ports”, 13 October 2026. https://www.theverge.com/news/1010406/xbox-labs-game-decompiling-emulation-exploration
- Windows Central (Jez Corden), “Microsoft formalizes “Xbox Labs” team, focused on unique tech like backward compatibility, Apple Silicon, and AI experiments”, 13 October 2026. https://www.windowscentral.com/gaming/xbox/microsoft-formalizes-xbox-labs-team-focused-on-unique-tech-like-backward-compatibility-fps-boost-and-ai-experiments
