Xbox announces what sounds like a generative AI-focused game-making department, Xbox Labs, while avoiding mentioning AI

Xbox is reacting – uncharacteristically quickly – to the deluge of vibe-coded game ports, decompiles and recompiles we’ve been seeing online in recent weeks by establishing Xbox Labs, a new initiative seemingly designed to explore the phenomenon.

Xbox Labs was announced by CEO Asha Sharma in a message sent to staff and published on Xbox Wire. The initiative is led by Xbox chief technical officer (CTO) Scott Van Vliet, who previously led Azure for OpenAI at Microsoft.

So what is Xbox Labs? The announcement doesn’t give a clear answer, with Sharma seemingly going out of her way to avoid mentioning AI or generative AI in the language.

“In recent weeks, we’ve seen games rapidly decompiled and rebuilt to run on hardware they were never originally designed to support,” wrote Sharma. “Perhaps more surprisingly, we’ve seen many of the biggest games in the world have been remixed into the source code of another.”

These “experiments” challenge long-held industry assumptions such as “the tether between software and hardware, the boundary between creation and play, and how people discover and experience games”, Sharma added. And Xbox Labs was formed to “explore” that and more.

For now, Labs represents “a small group of game makers, engineers and scientists” who will “turn emerging ideas into things our players and developers can experience”, Sharma said.”We’ll build in the open, learn from what people do, and measure success by whether more people are playing and creating.”

Sharma added: “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.”

If you’re interested in keeping up with its progress, you can sign up on the official Xbox Labs website to receive updates.

Xbox recently announced XP, a new division responsible for non-gaming partnerships like movie licensing and merchandising, consisting of four areas: Xbox Places, Xbox Pictures, Xbox Partnerships and Xbox Products.

The news also comes days after Google and Unity both announced gen-AI game-making platforms where users can supposedly create games using simple text prompts. Given how vague the Labs announcement is, it’s not clear if Microsoft is interested in the same idea.