Xbox CEO Asha Sharma has established XBOX LABS to test AI-assisted ideas for games. A small team led by Scott Van Vliet will explore experiments that could unsettle Xbox's established models; its first work has yet to be revealed.
On October 13, CEO Asha Sharma sent Xbox staff a memo announcing XBOX LABS. She also published it publicly. The new division will explore ways to create and experience games, including ideas that could weaken the long-standing links between software and hardware. It may also test different ways to access games. Sharma described a small team of game makers, alongside engineers and scientists, rather than a new game or commercial service.
Experiments with stakes
Sharma has cast the lab's work around possibilities for players and creators. That could mean making games easier to access, or giving older releases new life. She also wants to explore ways for more people to create or contribute to games. Independent coverage has pointed to game remixes and ports to other platforms as possible areas of interest. Browser-based play and tools involving software agents have also been cited, though Xbox has not confirmed any of them as projects.
The team plans to build in the open and learn from how people use its work. Sharma says success will depend on whether more people are playing and creating. Those outcomes could cut against established business models, she acknowledged. For now, Xbox has announced an experimental programme, not a specific product or a new access model.
There is a distinction between that research effort and mass-producing games with AI. Sharma's first public message as CEO warned against filling Xbox with low-quality AI-generated content. XBOX LABS, by contrast, is presented as a small effort to test ideas and tools. Its leader, Scott Van Vliet, previously oversaw Azure OpenAI and AI infrastructure at Microsoft, but the memo does not describe the entire initiative as an AI programme. It also does not say every experiment will use AI. The team has yet to show any work, so players have nothing to judge yet.
Xbox has made other organisational moves recently. The XP transmedia division launched days before XBOX LABS was announced. A sweeping studio-wide restructuring followed a few weeks earlier. Sharma said Xbox's priorities are unchanged and described Labs as a way to explore new technology while existing work continues. The source material does not link those organisational changes to the lab's remit.
What the lab will build
Chief Technical Officer Scott Van Vliet will lead the group. It will include game creators, alongside engineers and scientists. Van Vliet took the CTO role in May 2026. Before joining Xbox, he was a Microsoft corporate vice president responsible for Azure OpenAI and AI infrastructure. Sharma joined Xbox in February 2026 from Microsoft's CoreAI division.
The group is meant to turn emerging concepts into experiences for players and developers. Xbox has announced no release schedule and has named no first project. It has not identified the platforms where experiments might appear.
Sharma's case for applying AI to games starts with software agents. They can write code, then run and test it. She says games share those characteristics. People spend more than 72 billion hours a year playing XBOX games, roughly five times the estimated time spent writing code worldwide. Sharma also points to Xbox's 25 years of game-making experience as a reason its developers should help shape these tools. The announcement offers a research direction, but no performance measurements for agents or estimates of savings in development or porting.
Recent AI-assisted projects offer context, not a preview of XBOX LABS' plans. Bloodborne was among the games decompiled and rebuilt to run on PC. God of War 3 Remastered was another example. Forza Horizon 2 also appeared in the cited examples. So did Call of Duty 3.
The examples also included Super Mario Galaxy. The Legend of Zelda: Wind Waker was cited as well. The list included The Legend of Zelda: Link's Awakening. Metroid Prime was another title. Xbox says the new division is not being set up to decompile more console exclusives for PC.
Tools before promises
Van Vliet has said the team will examine different aspects and scales of play. It intends to share its experiments with the industry. That is the clearest commitment so far: Xbox plans to develop and show work, but has not said which tools it might release. There is no timetable, either, and developers have not been told what they would be able to do with them. Sharma says the experiments will challenge assumptions about the ties between software and hardware, creation and play, and how people discover games. She also wants to examine how they experience them.
Access is one issue raised by the lab's broad remit. A previous report covered an unofficial client that brought Xbox cloud gaming to jailbroken PS5s. That project involved cloud streaming, not XBOX LABS or its AI experiments.
The first experiments will show whether the lab's ideas become usable features or developer tools. They could also remain demonstrations. Xbox has not detailed a specific experiment or confirmed when it will share results. Sharma's stated measure of success is whether more people are playing and creating.
Software agents can carry out steps such as writing and testing code. That does not mean they can independently make a finished game. Games combine code with design. Art and sound matter too, alongside decisions about how people play. Xbox's announcement describes a research direction, not evidence that agents can replace those creative processes. It also provides no evidence that AI-generated content will appear in future releases.
