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Xbox creates new team to explore AI-powered game modding
Xbox Labs will be a small team

Xbox creates new team to explore AI-powered game modding

Oct 14, 2026
10:14 am

What's the story

Microsoft has announced the formation of a new team, Xbox Labs, to explore the potential of decompiling and recompiling games. The move comes as retro gaming is witnessing a surge in mods that allow classic titles to be ported onto new devices or even combined into entirely new experiences. The company has already seen some wild experiments like skateboarding being modded into Call of Duty and Halo running on web browsers.

Team composition

Xbox Labs will be a small team of game makers

Xbox Labs will be a small team of game makers, engineers, and scientists tasked with turning emerging ideas into experiences for players and developers.

"We'll build in the open, learn from what people do, and measure success by whether more people are playing and creating," said Xbox CEO Asha Sharma.

The new group will also explore how AI models can help modders remix games in unprecedented ways.

Industry impact

Sharma believes recent experiments challenge long-held assumptions about gaming

Sharma believes the recent experiments of running Windows PC builds on Apple Silicon or inside browsers challenge long-held assumptions about the gaming industry.

These include the connection between software and hardware, creation and play boundaries, and how people discover and experience games.

"While it is hard to predict the future of gaming, it is easy to see the possibilities in making great games easier to access," she said.

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AI integration

AI agents could influence where games are played

Sharma sees a major opportunity for Xbox in the use of AI agents.

She said, "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."

The new team will also look at how AI could influence where games are played and share any tools and learnings with developers.

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Tech exploration

Microsoft to explore how new technologies can shape gaming industry

Xbox Labs will be a platform for Microsoft to explore how new technologies can shape the gaming industry.

The company has already seen games rapidly decompiled and rebuilt to run on hardware they were never originally designed to support.

These experiments have shown that many of the biggest games in the world can be remixed into another's source code, challenging traditional boundaries between software and hardware, creation and play.

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