Xbox Chief Executive Officer Asha Sharma announced the creation of Xbox Labs on Tuesday (13), establishing a new internal division at Microsoft in Redmond, Washington, dedicated to experimental gaming technology. Led by Xbox Chief Technology Officer Scott Van Vliet, the unit brings together game creators, engineers, and scientists to turn emerging concepts into playable experiences and developer tools.
The executive communicated the launch through a global memorandum sent to employees at 4:08 p.m. Brasília time. “To explore these possibilities, I’ve asked Scott to stand-up XBOX LABS, a small group of game makers, engineers and scientists whose job is to turn emerging ideas into things our players and developers can experience. We’ll build in the open, learn from what people do, and measure success by whether more people are playing and creating,” Sharma stated.
Xbox Labs structure and operational metrics
The newly formed team will operate publicly, sharing the tools it develops with the broader video game industry rather than keeping them restricted to internal studios. The company noted in its official communication that its core priorities remain unchanged, maintaining its focus on games, hardware, and the responsible management of intellectual properties and communities without diverting attention from ongoing projects.
See also: Xbox creates XP division to expand gaming franchises into cinema and television
- Announcement date and time: October 13, 2026, at 4:08 p.m. (Brasília time)
- Headquarters location: Redmond, Washington, United States
- Division leadership: Asha Sharma (CEO of Xbox) and Scott Van Vliet (CTO of Xbox)
- Strategy executive: Matthew Ball (Chief Strategy Officer of Xbox)
- Annual engagement volume: 72 billion hours spent by the public playing Xbox titles per year
- Global browser reach: 90% approximate worldwide browser support for WebGPU technology
- Daily audience target: 1 billion players per day established as a reach goal by the CEO
- Industry milestones cited: 25 years of Xbox game development experience and approximately 75 years since the emergence of the first video games
How community experiments and software agents shaped Xbox Labs
The decision to formalize the group followed a wave of recent community-driven experiments in which video games were rapidly decompiled and rebuilt to run on hardware for which they were never originally designed. Among the examples cited in the announcement are Windows PC game versions translated to run natively on Apple Silicon processors, classic titles ported to execute directly inside web browsers using WebAssembly — a binary instruction format for web execution — and WebGPU — a web graphics programming interface — as well as major games that had their source codes remixed together.
Prior to the public announcement, Xbox had already been conducting internal tests to run original Xbox and Xbox 360 titles directly inside web browsers. The creation of the division formalizes those internal efforts after independent community projects recently went viral, including a browser-based version of Halo: Combat Evolved running at 94 frames per second and game decompilations assisted by artificial intelligence. “While it is hard to predict the future of gaming, 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. These are unmistakably good outcomes for players, even when (and sometimes because) they challenge our existing business models,” Sharma said.
Check out: Microsoft adds 41 releases across Xbox Series X|S, PC and Game Pass through October 16
Microsoft also pointed to the growing role of software agents in computer programming, noting that these automated systems are capable of writing, executing, and testing code independently. Because video games share many of the same structural properties as standard software, the company views the gaming sector as a natural environment to explore these technologies. “I think XBOX has an important role to play here. Coding became the first major workload for agents because they can write, run, and test software. Games share many of those same properties, and people spend more than 72 billion hours a year playing XBOX games, roughly five times the estimated time spent writing code worldwide,” Sharma explained.
Follow: Microsoft plans Ninja Theory closure in new 268 job Xbox reduction
Recent leadership changes and the XP division at Xbox
The establishment of the experimental unit follows a broader series of organizational adjustments within Microsoft’s gaming business over the past six months. Both Sharma, who joined from Microsoft’s CoreAI division, and Van Vliet moved into their current leadership roles earlier in the year, preceding a wider restructuring of the company’s entertainment and studio management teams alongside the rollout of the Xbox application on Hisense televisions operating with the VIDAA system.
- May 2026: Scott Van Vliet assumed the role of Chief Technology Officer of Xbox, while CEO Asha Sharma shut down the Gaming Copilot project during the same month.
- Thursday, October 8, 2026: Five days before the Xbox Labs announcement, Xbox created the XP division — a play on the term “Experience Points” — to expand gaming franchises beyond consoles across four distinct pillars: Xbox Pictures for film and television, Xbox Products for licensing and merchandise, Xbox Partnerships for sponsorships and brand collaborations, and Xbox Places for live experiences and theme parks.
- Thursday, October 8, 2026: Kayleen Walters, former president of Mojang, was appointed president of the newly created XP division, while Maria Angelidou-Smith, a former chief product officer at Reddit and former executive at Meta, was named CEO of Mojang and Minecraft to replace Walters.
Unconfirmed release details and public registration for Xbox Labs
Microsoft has not disclosed release dates, a delivery schedule, or the monetization model — such as upfront pricing, microtransactions, or advertising — for future projects and tools developed by Xbox Labs. A public website for the division is already live under the slogan “Let’s play with what’s next,” featuring an email registration form for players and developers to sign up for future updates.
