Xbox CEO Asha Sharma has announced the creation of Xbox Labs, a new team within the organisation to “turn emerging ideas into things our players and developers can experience.” The unit is a “a small group of game makers, engineers and scientists,” drawn from within the business, charged with rapid development, iteration and testing of tools, products and features that will be judged by the reaction of end users. “We’ll build in the open, learn from what people do, and measure success by whether more people are playing and creating,” said Sharma in the blog post.
She described the creation of Xbox Labs as spurred by recent mashups and code porting, many of which have been created using AI tools, which she said highlighted “the possibilities in making great games easier to access, giving old games new life and allowing more players to become creators and co-creators. These are unmistakably good outcomes for players, even when (and sometimes because) they challenge our existing business models.”
While Sharma referred to the rise of coding by AI agents and the recent glut of AI-developed game mashups that have been popular on social media, a company spokesperson clarified to GamesIndustry.biz that Xbox Labs did not have an explicit directive to use AI or any other technologies, and that its output would use it only to the degree that it would be beneficial or necessary.
Like Xbox XP, announced last week, Xbox Labs is a centralisation of existing initiatives, rather than an entirely new endeavour. The spokesperson characterised it as formalising work around a number of ongoing R&D projects, including work like porting games to Apple silicon, investigating browser-based distribution – particularly targeting the widely available WebGPU platform – and developing and supporting game modders. No new staff have been recruited for the project.
The firm has a number of projects, some explicitly game-based and others more general, that have been in development for some time and would fall under the remit of Xbox Labs. Examples include making existing games playable through web browsers, additional game features, and expanding multiplayer experiences. The spokesperson said that Xbox Labs had no product announcements currently planned, and it would not have a fixed route to users: while some Labs projects may manifest as features made available to the Xbox Insiders program, others may target different user bases and would be distributed appropriately.
The stated focus on open development judged by user metrics is the latest in a series of moves within Sharma’s ongoing reorganization of Xbox – which has included the sale or closure of multiple studios, and the loss of thousands of jobs – that reflect a shift towards a product-focused approach to development, reflecting her background at Microsoft’s Core AI, Instacart, and Meta, rather than traditional game development.
This has included the launch of Xbox XP to formalise the extension of its gaming brands to new formats; the appointment of Maria Angelidou-Smith, former product leader at Reddit and Facebook, as CEO of Mojang, the latest in a series of executive hires from a technology and growth background; and the alignment of Mojang and King – the studios most focused on iterative product development rather than shipping new titles – to report directly to Sharma, while the other game studios are under Matt Booty.
In the blog post, Sharma said that the firm’s priorities were not changing and it remained committed to the “4Cs” previously listed as goals for 2027, in a memo published by The Verge:
- CORE: Strengthen our platform, led by console
- CONTENT: Grow great games into global franchises
- CREATION: Make Minecraft the world’s creator platform
- CONNECTION: Extend the worlds that fans love
“LABS gives us a way to explore new technology without abandoning the work already underway,” she said.
