Xbox forms Xbox Labs to explore decompiled and AI-assisted game ports
Microsoft is setting up a new group called Xbox Labs to explore the wave of decompilations and recompilations that are letting gamers move classic titles to new devices or merge code from two games into one. The Verge notes that Microsoft has seen skateboarding modded into Call of Duty and Halo played in a web browser, and that many of these mods use AI models to help modders remix games in ways rarely seen before.
The announcement comes from Xbox CEO Asha Sharma in a memo addressed to the team, which The Verge published in full. Sharma describes Xbox Labs as a "small group of game makers, engineers and scientists" whose job is to turn emerging ideas into things players and developers can experience. She says she has asked Scott (no surname or title is given) to stand it up. The group will build in the open, learn from what people do, and measure success by whether more people are playing and creating.
The memo points to what has happened in recent weeks: games rapidly decompiled and rebuilt to run on hardware they were never designed for. Windows PC builds have been translated to run on Apple Silicon or ported to run inside a browser through WebAssembly and WebGPU, the latter now approaching 90% global browser support. Sharma adds that many of the biggest games in the world have been remixed into the source code of another. She says these experiments challenge long-held assumptions about the industry: the tether between software and hardware, the boundary between creation and play, and how people discover and experience games.
Sharma frames the outcomes as good for players, even when, and sometimes because, they challenge Xbox's existing business models. She also makes an argument for Xbox's role in AI agents. Coding became the first major workload for agents because they can write, run, and test software; games share many of those properties, she says, and people spend more than 72 billion hours a year playing Xbox games, roughly five times the estimated time spent writing code worldwide. Xbox has spent 25 years learning how to make great games, she writes, and wants its game makers to help shape what these technologies make possible. As it learns, Xbox will share the tools it builds with developers across the industry.
The memo also tries to reassure. Priorities are not changing, Sharma writes: Xbox remains committed to the 4Cs, to making great games, to its hardware and to being responsible stewards of IP and the communities around it. Labs, she says, is a way to explore new technology without abandoning work already underway.
The Verge's author adds commentary. Modders are now doing the kind of work Microsoft has done for decades with Xbox backward compatibility, but without the business model restrictions Microsoft is tied to. The bigger question, the author writes, is how Microsoft will respond to decompiled games where modders take its IP and make it freely available. The author asked Microsoft about unauthorized IP use, and the company did not respond in time for publication.
Key facts
- Xbox CEO Asha Sharma announced Xbox Labs in a memo: a small group of game makers, engineers and scientists meant to experiment with decompiled, recompiled and AI-assisted game ports and mods.
- Sharma cites recent experiments in which Windows PC builds were translated to run on Apple Silicon or ported to run in a browser through WebAssembly and WebGPU.
- She says people spend more than 72 billion hours a year playing Xbox games, roughly five times the estimated time spent writing code worldwide, and links that to a role for Xbox in AI agents.
- Xbox says it will build in the open and share the tools it builds with developers across the industry.
- Microsoft did not respond to The Verge's request for comment on unauthorized IP use.
Why it matters
A platform holder is publicly calling decompiled, recompiled and AI-assisted ports good outcomes for players, rather than treating them only as a threat. Sharma says the experiments challenge assumptions about the tether between software and hardware, the boundary between creation and play, and how people discover games. She also ties games to AI agents, arguing that games share the properties that made coding the first major agent workload: agents can write, run and test software.
Who it affects
Players who want games on devices they were not built for, modders who decompile and remix games, and developers across the industry, with whom Xbox says it will share the tools it builds. It also concerns Xbox's own game makers, whom Sharma wants to help shape what these technologies make possible, and publishers watching how Microsoft handles IP.
How to use it
There is nothing to use yet. No specific tools, products or projects Xbox Labs will release are named. What the memo offers is a commitment: Xbox says it will build in the open, learn from what people do, and share the tools it builds with developers across the industry.
How solid is it
The core facts come from Sharma's own memo, which The Verge published in full, so the existence and stated purpose of Xbox Labs are firsthand. It is a strategic announcement rather than a shipped result. No date for the launch of Xbox Labs is given, and no budget, headcount or named members beyond Scott are stated. The commentary about Microsoft's likely reaction belongs to The Verge's author, not to Microsoft.
Risks and caveats
The open question is IP. The Verge's author says modders are making Microsoft's IP freely available and that the author cannot see Microsoft and other publishers seeing the fun side if modern console games start to appear where they should not. Microsoft did not respond in time for publication when asked about unauthorized IP use. The memo itself says Xbox remains committed to being a responsible steward of IP and the communities built around it, and says its business models may be challenged by these outcomes.
“These are unmistakably good outcomes for players, even when (and sometimes because) they challenge our existing business models.”
— Asha Sharma, Xbox CEO, in a memo to the team