Dustin Tigner

Today we're standing up XBOX LABS (labs.xbox.com). Here is the note that I sent to the team: Team, The first video games emerged some 75 years ago. In the time since, there have been booms and busts, but every year there are more great games to play, more devices to play them, and best of all, more people than ever playing. That growth helped make XBOX what it is today, and we've helped shape the industry in return, from bringing hard drives to consoles and online gaming through Xbox Live to Game Pass and cloud gaming, alongside franchises that have brought millions of people together. In recent weeks, we've seen games rapidly decompiled and rebuilt to run on hardware they were never originally designed to support. 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. 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 assumptions about our industry: the tether between software and hardware, the boundary between creation and play, 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, giving old games new life and allowing more players to become creators and co-creators. These are unmistakably good outcomes for players, even when (and sometimes because) they challenge our existing business models. To explore these possibilities, I’ve asked Scott to stand-up XBOX LABS, a small group of game makers, engineers and scientists whose job is to turn emerging ideas into things our players and developers can experience. We'll build in the open, learn from what people do, and measure success by whether more people are playing and creating. 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. We've spent 25 years learning how to make great games, and I want our game makers to help shape what these new technologies make possible. As we learn, we’ll share the tools we build with developers across the industry, just as we always have. Our priorities aren't changing. We remain committed to the 4Cs, to making great games, to our hardware and to being responsible stewards of IP and the communities built around it. LABS gives us a way to explore new technology that is game design led without abandoning the work already underway. Asha

what people misunderstand about the age of personal software is that most consumers don't even want the software; they want the outcomes consumers don't care about your photoshop rust clone they want ai to fix their pictures and just say what they want; they don't care about 50 layer filter types same goes for presentations, documents, anything people want outcomes, not more software, personal or not

I feel mixed about the "all software is becoming open source" narrative. While it's true that many apps and games can basically be reverse-engineered with AI now, there are still moats and trade-offs: 1. Distribution and network effects. It's still hard to get a lot of people to join a game at the same time or connect with each other. The flip side here is that if you have distribution, you can make alot of money in a short period of time even if your product is just an AI wrapper. 2. Enterprise compliance and trust. Enterprises drive ~60% of software spend. AI might make it easier for apps to pass security and compliance reviews, but big companies still want legal liability, support, and someone to blame when things break. I don't think any Fortune 500 company is switching from Adobe to an open-source alternative anytime soon. The counter-argument here is that enterprises might just build apps internally, which many are already doing. I also think that many enterprise apps have become so bloated that most companies only need 20% of the features which makes vibe coding an internal replacement easier. 3. Proprietary data and memory. This is the #1 moat if your app can generate proprietary data on users or usage. The counter-argument here is that if your app actually generates valuable data, you can probably make more money just making it free and selling the data to AI labs instead of charging $25/month or whatever as a SaaS. For example, Reddit is making $200M+ from its data licensing deals with OpenAI and Google, which far exceeds whatever it made from paid consumer subscriptions. What do people think? Is it harder or easier now to make money from software?

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