Xbox CEO Asha Sharma Creates Xbox Labs to Explore Emerging Tech

Xbox CEO Asha Sharma announced the creation of Xbox Labs, a small internal group of game makers, engineers and scientists tasked with turning emerging ideas into experiences for players and developers, in a message sent to Team Xbox employees and published on Xbox Wire on October 13, 2026.

Sharma wrote that she had asked Scott, identified in the post by first name only, to stand up the group. Its members are game makers, engineers and scientists, and their job, she wrote, is to turn emerging ideas into things 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,” she wrote.

A dedicated site at labs.xbox.com offers an email signup for Xbox Labs news and offers from Microsoft. The announcement also recounts Xbox’s past contributions to the industry, from bringing hard drives to consoles and online gaming through Xbox Live to Game Pass and cloud gaming, alongside franchises that have brought millions of people together. The first video games emerged some 75 years ago, the post notes.

Decompiled Games, Browser Ports and Remixes

Sharma wrote that in recent weeks, games have been rapidly decompiled and rebuilt to run on hardware they were never originally designed to support. Windows PC builds have been translated to run on Apple Silicon or ported to run inside a browser through WebAssembly and WebGPU, she wrote, with the latter now approaching 90% global browser support. Many of the biggest games in the world have been remixed into the source code of another, she added.

These 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. Sharma said easier access to great games, new life for old games and more players becoming creators and co-creators are clearly good outcomes for players, holding that this remains true even when such shifts challenge Xbox’s existing business models, and at times because of that challenge.

Agents, Playtime and Shared Tools

Sharma wrote that coding became the first major workload for agents because they can write, run and test software, and that games share many of those same properties. People spend more than 72 billion hours a year playing Xbox games, roughly five times the estimated time spent writing code worldwide, according to the post. She said Xbox has spent 25 years learning how to make great games, and that she wants its game makers to help shape what these new technologies make possible. As Xbox learns, it will share the tools it builds with developers across the industry, she added.

Unchanged Priorities and the Xbox Reset

Sharma wrote that Xbox’s priorities are not changing, and 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 gives us a way to explore new technology without abandoning the work already underway,” she wrote.

Sharma joined Xbox as CEO in February 2026, according to a June 10 Xbox Wire post she co-authored with Matt Booty. That post stated that more than 1 billion players choose to play Xbox and its games each year, for a total of 72 billion hours across console, PC, mobile and streaming, excluding much of China and a few other properties. It said Xbox would end the fiscal year at about a 3% accountability margin, and that, excluding Activision Blizzard King, it had spent more than $20 billion over five years on content, platform and hardware subsidy while annual revenue declined nearly half a billion dollars. The post also described a hardware component crisis in which console storage component prices had more than doubled from the previous fall and then doubled again, with another significant increase expected as Xbox planned for the 2027 holiday season, taking prices to more than five times those paid two years earlier.

On July 6, 2026, Sharma announced what she called the most significant restructure in Xbox history, reducing the team by approximately 3,200 roles through fiscal 2027, including approximately 1,600 role eliminations that day, according to the July 6 memo published on Xbox Wire. Four studios would leave Xbox to new management, Mojang and King would report directly to Sharma, and Helen Chiang was promoted to a newly created chief operating officer role. The plan also committed Xbox to reducing management layers from as many as 14 to no more than 5.

On September 22, 2026, Booty wrote in a follow-up memo that Xbox had eliminated 268 further roles and that actions since July, including studio divestitures, had brought the company roughly three-quarters of the way through the announced restructuring. The memo reorganized Xbox’s studios: Activision expands its remit to World’s Edge and Rare and will develop the next Halo title, Bethesda adds Obsidian, King adds Microsoft Casual Games, and Playground and Turn 10 come together around the Forza and Fable franchises. Booty also confirmed that Undead Labs had transitioned to new ownership and will release State of Decay 3 day one on Game Pass, that Xbox would now begin consultation with Ninja Theory employees on a proposed closure, and that consultation with Arkane was expected to continue through the end of the year.