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Xbox CEO Asha Sharma has officially unveiled Xbox Labs, a new division within the company tasked with transforming emerging concepts into tangible experiences for players and developers. Led by Xbox chief technology officer Scott Van Vliet, the team aims to build in the open and evaluate success based on increased player engagement and creative participation.

The initiative serves as a response to recent industry trends where unauthorized projects have successfully ported games to new hardware, such as running Bloodborne on PC or Halo: Combat Evolved in a web browser. Sharma noted that these developments challenge traditional boundaries between software and hardware, as well as the distinction between creation and play.

While the announcement does not explicitly mention generative AI, the project follows a shift in strategy compared to Sharma's February comments, which emphasized human-crafted art over AI-driven efficiency. Despite this, Sharma maintains that the company remains committed to its core priorities and responsible stewardship of intellectual property, viewing the lab as a way to explore new technology alongside existing projects.

The launch of Xbox Labs coincides with Epic Games confirming its own pivot toward AI-accelerated development. While the specific outputs of the new Xbox division remain unclear, the team's website currently features background trailers for titles including Sea of Thieves, Fable, and Gears of War: E-Day.

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