Microsoft Launches Xbox XP Division to Expand Games Into Movies, TV and Live Events

Microsoft has launched Xbox XP, a new entertainment division designed to expand its gaming franchises into movies, television, merchandise, live events and other experiences beyond video games. The move brings several existing Xbox activities under one organisation as Microsoft seeks to build stronger entertainment businesses around its most recognisable properties.

Kayleen Walters, the former head of Minecraft developer Mojang Studios, will lead the division. Announced on October 8, Xbox XP will coordinate entertainment projects across Microsoft’s gaming portfolio while working with internal studios and outside production partners.

Microsoft outlined the new structure in an official Xbox announcement, describing XP as an effort to connect established gaming communities with new audiences through entertainment, merchandise and physical experiences.

Xbox XP Will Oversee Four Entertainment Businesses

Xbox XP is organised around four areas: Xbox Pictures, Xbox Products, Xbox Places and Xbox Partnerships. Each focuses on a different way of extending gaming franchises beyond the titles that originally established them.

Xbox Pictures will handle film and television adaptations, working with creative partners to bring gaming characters and fictional worlds to other screens. Xbox Products will focus on merchandise and licensing, including consumer goods based on the company’s entertainment properties.

Xbox Places will oversee live events, broadcasts, attractions and location-based experiences. Xbox Partnerships will manage relationships with brands, creators and sponsors interested in collaborating with Xbox franchises.

The organisational change does not mean Microsoft is entering all these businesses for the first time. Xbox already participates in entertainment licensing, merchandise and events. XP gives those activities dedicated leadership and a shared strategy, rather than leaving them distributed across separate teams.

Former Mojang Leader Kayleen Walters Takes Charge

Walters brings experience managing entertainment properties across multiple formats. Before joining Microsoft, she spent 13 years at Lucasfilm, working on businesses connected to the Star Wars franchise. At Mojang, she helped expand Minecraft’s licensing and merchandise operations while participating in its move into theatrical entertainment.

She also served as an executive producer on A Minecraft Movie and is involved in its sequel. That background is particularly relevant to Xbox XP because Minecraft shows how a game can support a broader business involving films, merchandise, and attractions without relying entirely on new game releases.

According to Microsoft’s leadership announcement, Mojang’s consumer products business grew into a multibillion-dollar operation involving more than 250 licensees during Walters’ tenure.

Her appointment also brings a leadership change at Mojang. Maria Angelidou-Smith, previously Reddit’s chief product officer, will become CEO of Mojang and Minecraft on October 19. Both executives will report directly to Xbox CEO Asha Sharma.

Microsoft Already Has Major Gaming Adaptations Underway

Xbox XP arrives as Microsoft moves several gaming properties into film and television development. A sequel to A Minecraft Movie is planned, while Fallout continues its television expansion through Amazon’s Prime Video service. Other projects involving Call of Duty and Diablo also show the industry’s broader interest in turning established video games into entertainment franchises.

Fallout provides one of the clearest examples of the opportunity. Its television adaptation has attracted viewers beyond the game’s existing audience, and Amazon has confirmed that Fallout Season 3 is in development. Amazon MGM Studios and Kilter Films produce the series in association with Bethesda’s gaming businesses.

However, creating Xbox XP does not mean Microsoft’s new division will produce every adaptation directly. Existing productions involve separate studios, distributors and commercial arrangements. XP’s broader role is to coordinate how Xbox franchises expand across these entertainment categories.

That distinction matters because television audiences, cinema audiences, and gaming communities don’t necessarily respond to a franchise the same way. Successful adaptations need to work as entertainment on their own, rather than relying solely on recognition of the original game.

Why Microsoft Is Expanding Xbox Beyond Gaming

For Microsoft, XP represents another way to develop the commercial potential of franchises already supported by large audiences. A popular game can generate revenue through software sales and subscriptions, but film licensing, branded products and attractions offer additional opportunities to reach consumers who may never purchase a console.

It also offers a longer-term branding advantage. A successful television adaptation can introduce unfamiliar audiences to a gaming franchise, while merchandise and live experiences can maintain interest between major game releases. These activities could help Microsoft make its entertainment properties less dependent on individual launch cycles.

The approach fits into the broader restructuring of Xbox under Sharma, who became CEO earlier in 2026. Microsoft is seeking to strengthen its gaming business while developing more coordinated franchise plans. XP puts the entertainment and licensing side of that effort under one executive.

Microsoft has attempted a dedicated entertainment operation before. Xbox Entertainment Studios launched in 2012 but shut down in 2014 as the company shifted priorities. The new XP division has a different scope because it combines screen adaptations with existing licensing, partnerships and live experiences rather than concentrating primarily on original video programming.

What Xbox XP Means for the Future of Microsoft Gaming

The immediate impact for Xbox players may be limited. Microsoft has not presented XP as a new game development organisation, and the announcement adds no new games, release dates, or dedicated entertainment subscription service.

Instead, the division is intended to give Microsoft’s existing franchises a more coordinated path into other markets. Its success will depend on the quality of future adaptations, the appeal of licensed products, and whether live experiences can reach audiences without weakening the original games’ identities.

For Xbox, the opportunity is substantial, but creating a separate division does not guarantee commercially successful films, television series or merchandise. The challenge will be deciding which properties can support expansion and finding partners who can bring those projects to market.

With Walters overseeing XP and a dedicated structure covering four entertainment businesses, Microsoft is making franchise development a more formal part of its Xbox strategy. The announcement signals that the company increasingly views its gaming properties not only as software products, but as entertainment brands capable of reaching audiences far beyond the console market.