Xbox creates Xbox Labs, a small internal team of existing staff

Xbox CEO Asha Sharma announced the creation of Xbox Labs on October 13, 2026, a small internal team of game makers, engineers and scientists drawn from existing staff, according to gamesindustry.biz. The team is tasked with rapid development, iteration and testing of tools, products and features judged by user feedback.

Sharma said the team will build in the open and measure success by whether more people are playing and creating. No new staff were recruited for Xbox Labs, and a spokesperson said the team has no product announcements currently planned.

A company spokesperson said Xbox Labs has no explicit directive to use AI, only using it where beneficial or necessary. The spokesperson described the team as formalising ongoing research and development work, including porting games to Apple silicon, browser-based distribution targeting WebGPU, and supporting game modders.

Earlier Xbox restructuring

The announcement follows Xbox XP, unveiled around early October 2026 as a formalisation of extending Xbox gaming brands to new formats. Mojang and King were aligned to report directly to Sharma, while other game studios report under an executive overseeing Xbox game studios. Sharma previously listed the '4Cs' goals for 2027 — Core, Content, Creation, Connection — in a memo published by The Verge.