The modding community just got Microsoft's attention. After weeks of fan projects decompiling classic games, porting them into web browsers, and remixing major titles into each other's source code, Xbox has created a division of its own to chase the same ideas: Xbox Labs, a small experimental team that will turn emerging technology into things players and developers can actually try.
In a memo to staff published on Xbox Wire on October 13, Xbox CEO Asha Sharma announced the division and her pick to run it: Xbox chief technology officer Scott Van Vliet. Sharma described 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."
The memo points directly at the recent wave of community experiments. In recent weeks, games have been rapidly decompiled and rebuilt to run on hardware they were never designed for: Windows PC builds translated to Apple Silicon, titles ported into browsers through WebAssembly and WebGPU — the latter now approaching 90 percent global browser support — and some of the biggest games in the world remixed into the source code of another. Sharma wrote that these experiments challenge the tether between software and hardware, the boundary between creation and play, and how people discover games — and called the outcomes good for players even when they challenge Xbox's existing business models.
Labs will not work behind closed doors. "We'll build in the open, learn from what people do, and measure success by whether more people are playing and creating," Sharma wrote, adding that as the team learns, Xbox will share the tools it builds with developers across the industry.
The announcement is also, unmistakably, about AI agents — even though the memo never uses the word AI. Sharma noted that coding became one of the first major workloads for software agents because they can write, run, and test software, and argued that games share those same properties. Players spend more than 72 billion hours a year playing Xbox games, roughly five times the time spent writing code worldwide — and Sharma wants Xbox's game makers shaping what the technology makes possible rather than watching from outside. Van Vliet's background fits the brief: before becoming Xbox CTO in May, he was a Microsoft corporate vice president overseeing Azure OpenAI and AI infrastructure.
You can read Sharma's memo below:
Xbox Labs is the second new division Sharma has stood up in a matter of days, following the XP division for films, products, partnerships, and live experiences under Kayleen Walters. Sharma stressed that Xbox's core priorities — dedicated hardware, its franchises, and its existing strategy — remain unchanged. The Labs website is live at labs.xbox.com with an email sign-up under the tagline "let's play with what's next," but there are no projects, tools, or dates to try yet.
Sources: Xbox Wire, Xbox Labs website
