XBOX Creates XBOX LABS to Explore AI Agents and Game Decompilation

Microsoft’s XBOX gaming business announced XBOX LABS on October 13, 2026, a small internal group of game makers, engineers, and scientists charged with turning emerging ideas into experiences for players and developers, according to a memo from XBOX CEO Asha Sharma published on XBOX Wire.

The XBOX Wire post reproduces the message Sharma sent to Team XBOX employees globally the same day. In it, she said she had asked Scott to stand up the group, and she laid out how it will operate: building in the open, learning from how people respond to its work, and measuring success by whether more people are playing and creating.

A public destination for the group is also live. The XBOX Labs site carries the tagline “Let’s play with what’s next” and offers an email signup for updates about XBOX Labs from Microsoft.

Decompilation and Recompilation Experiments

Sharma’s memo anchors the new group in a wave of porting and remixing experiments. In the weeks before the memo, she wrote, games had been rapidly decompiled and rebuilt to run on hardware they were never originally designed to support, including Windows PC builds translated to run on Apple Silicon or ported to run inside a browser through WebAssembly and WebGPU. The memo states that WebGPU is approaching 90% global browser support, and that many of the biggest games in the world have been remixed into the source code of another game.

Those experiments challenge long-held assumptions about the industry, she wrote: the tether between software and hardware, the boundary between creation and play, and how people discover and experience games. While it is hard to predict the future of gaming, she wrote, it is easy to see the possibilities in making great games easier to access, giving old games new life, and allowing more players to become creators and co-creators — outcomes she described as unmistakably good for players, even when, and sometimes because, they challenge XBOX’s existing business models.

AI Agents, Playtime, and Developer Tools

Sharma also connected the group’s mission to AI agents. Coding became the first major workload for agents because they can write, run, and test software, she wrote, and games share many of those same properties. People spend more than 72 billion hours a year playing XBOX games, she stated, roughly five times the estimated time spent writing code worldwide. The memo notes that XBOX has spent 25 years learning how to make great games, and Sharma said she wants its game makers to help shape what these new technologies make possible. As the group learns, she wrote, XBOX will share the tools it builds with developers across the industry, as it always has.

Leadership and Company Background

The memo opens by noting that the first video games emerged some 75 years ago, and it recounts XBOX’s own contributions to the industry: bringing hard drives to consoles, online gaming through Xbox Live, Game Pass, and cloud gaming, alongside franchises that have brought millions of people together.

Sharma has led the business since early 2026. Microsoft announced her appointment as Executive Vice President and CEO of Microsoft Gaming on February 20, 2026, and an editor’s note on that post records that as of April 23, 2026, Microsoft Gaming is known as XBOX and her title is CEO XBOX. In her first-day message to employees, she set three commitments: great games, the return of Xbox, and the future of play. On the last of those, she said the company would build a shared platform and tools that empower developers and players to create and share their own stories, and that as monetization and AI evolve it would not “chase short-term efficiency or flood our ecosystem with soulless AI slop,” describing games as art crafted by humans. The same announcement named Matt Booty as Executive Vice President and Chief Content Officer, and a message from Microsoft Chairman and CEO Satya Nadella stated that Microsoft Gaming had grown to span nearly 40 studios across Xbox, Bethesda, Activision Blizzard, and King.

Sharma’s official XBOX biography states that she is Chief Executive Officer of XBOX and an Executive Vice President of Microsoft. Before becoming CEO, she served as President of Product for Microsoft’s AI tools and application infrastructure, spanning Azure, GitHub, and Visual Studio Code, with products supporting more than 180 million developers and hundreds of thousands of enterprises building AI applications and agents. Earlier, she was Chief Operating Officer of Instacart, Vice President of Product at Meta, and Chief Operating Officer of Porch Group. According to the biography, XBOX reaches more than one billion players each year and is home to franchises including Call of Duty, Candy Crush, Diablo, Fallout, Halo, Minecraft, The Elder Scrolls, and Warcraft.

Unchanged Priorities

The memo closes by stating that XBOX’s priorities are not changing. Sharma wrote that the company remains committed to the 4Cs, to making great games, to its hardware, and to being responsible stewards of IP and the communities built around it. LABS, she wrote, gives XBOX a way to explore new technology without abandoning the work already underway.