Xbox announces Xbox Labs, a new initiative to test emerging ideas and “new technologies”

Xbox CEO Asha Sharma announced the creation of Xbox Labs, a new team within the organization to “turn emerging ideas into things our players and developers can experience.” The unit is a “small group of game designers, engineers, and scientists” from within the company, responsible for rapid development, iteration, and testing of tools, products, and features that will be judged by end-user feedback. “We will build in the open, learn from what people are doing, and measure success by how many people play and create,” Sharma said in the blog post.

She described the creation of Xbox Labs as spurred by recent code mashups and ports, many of which were created using AI tools, which she said highlighted “the possibilities of making great games easier to access, breathing new life into old games, and enabling more players to become creators and co-creators.” These are undeniably good outcomes for players, even when (and sometimes because) they challenge our existing business models.

While Sharma was referring to the rise of AI agent coding 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 had no explicit directive to use AI or any other technology, and that its production would only use it to the extent that it was beneficial or necessary.

Like Xbox XP, announced last week, Xbox Labs is a centralization of existing initiatives, rather than an entirely new company. The spokesperson called it a formalization of work around a number of ongoing R&D projects, including work such as porting games to Apple silicon, studying 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 company has a number of projects, some explicitly gaming-based and others more general, that have been in development for some time and would fall under the purview of Xbox Labs. Examples include the ability to make existing games playable through web browsers, additional gaming features, and expanding multiplayer experiences. The spokesperson said that Xbox Labs currently has no product announcements planned and that there would be no 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 emphasis 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 several studios and the loss of thousands of jobs — that reflect a shift toward a product-focused approach to development, reflecting his experience at Core AI, Instacart and Microsoft’s Meta, rather than traditional game development.

This includes the launch of Xbox XP to formalize the expansion of its gaming brands into new formats; the appointment of Maria Angelidou-Smith, former product manager at Reddit and Facebook, as CEO of Mojang, the latest in a series of executive hires from the technology and growth community; 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 report to Matt Booty.

In the blog post, Sharma said the company’s priorities are not changing and that it remains committed to the “4Cs” previously listed as goals for 2027, in a note published by The Verge:

• CORE: Strengthening our console-led platform
• CONTENT: Develop great games into global franchises
• CREATION: Make Minecraft the world’s creation platform
• RELATED: Expand the Worlds Fans Love

“LABS gives us a way to explore new technologies without abandoning work already underway,” she said.