Xbox launches XP division to take its games into film, TV, merch and theme parks

Microsoft is betting that Xbox can be more than a game console. On October 8, Xbox announced a new Xbox XP division that will manage film and television adaptations, merchandise, brand partnerships and live experiences such as events and theme park style attractions. It is the clearest sign yet that Xbox wants its biggest franchises, from Minecraft to Fallout, to earn money far beyond the controller.

The move comes during a rough year for Xbox, with layoffs, restructuring and higher prices for players. That context explains a lot about why the company is looking for new ways to grow, and why some fans reacted with skepticism.

What the Xbox XP division is

Xbox CEO Asha Sharma said the name "XP" is a play on "Experience Points," the familiar gaming term. According to Thurrott, the new unit formalizes four investment areas:

• Xbox Pictures for film and television adaptations.
• Xbox Products for licensing and merchandise.
• Xbox Partnerships for sponsors and brand deals.
• Xbox Places for major broadcast and in person events, theme parks and other experiences tied to a physical location.

"Our franchises can mean more to people than the time they spend playing them," Sharma said, as quoted by both Thurrott and Cybernews.

Who is running it

Kayleen Walters will lead XP as its president and report directly to Sharma. Walters was previously president of Mojang Studios, the Microsoft owned studio behind Minecraft. Sharma said Walters knows how to build these experiences with the wider entertainment industry, according to Cybernews.

Her move created an opening at Mojang. Xbox named Maria Angelidou-Smith as the new CEO of Mojang and Minecraft, also reporting to Sharma. Thurrott reports that Angelidou-Smith was most recently chief product officer at Reddit (a company making its own big platform changes, like ending RSS feeds and its public API) and spent almost a decade at Meta, where she worked on Facebook Groups, Events and monetization. Sharma said her first priority will be learning from the teams and communities who know Minecraft best.

Why Xbox is doing this now

The obvious reason is that it has already worked. *A Minecraft Movie* earned $163 million in the United States, according to Cybernews, and Amazon's *Fallout* series showed that a Microsoft owned game world could become a hit show. Those successes reached people who may never have touched an Xbox.

Other entertainment companies have followed the same playbook for years. Nintendo has films and theme park areas. Sony turned several PlayStation games into movies and series. Disney built an empire on the idea that a character should show up on screens, shelves and in parks. Xbox has a deep catalog of its own, especially after its large studio acquisitions, but until now it has not had a single group dedicated to stretching those worlds across media.

There is also a business reason that is harder to ignore. Console hardware is a tough market, and Xbox has been raising prices. Cybernews notes that console prices have gone up for the third time since last year, and that starting in November, Xbox cloud gaming will be capped at 15, 10 or 5 hours per month depending on the plan. A division that earns money from licensing, merchandise and events can grow without selling more consoles. We have seen similar thinking across media, from the Paramount Skydance and Warner Bros. Discovery deal to streaming companies building franchise libraries.

Xbox has tried something like this before

This is not Microsoft's first attempt at entertainment. Thurrott points out that Xbox Entertainment Studios, an Xbox One era unit that made original films and series, shut down in 2014, a couple of months after Phil Spencer became head of Xbox. Cybernews also notes the irony that Xbox closed its Movies and TV app in 2025.

The difference this time is focus. The old studio tried to make original shows for Xbox owners. XP appears built around licensing proven game worlds to partners and putting them in front of the widest possible audience.

Who is affected

Xbox players. In the short term, very little changes in how you play. But fans have reason to watch where Microsoft spends its money. Cybernews reported mixed reactions online, with one user saying, "Let's get the consoles successful before we start making theme parks." Others argued that a bigger pop culture footprint could keep franchises relevant and help the games themselves.

Minecraft's community. Minecraft now has a new chief who comes from social platforms rather than game development. How Angelidou-Smith approaches a game with a huge, young and very vocal audience will matter a lot to that community.

Entertainment and retail partners. Studios, toy makers, event organizers and brands now have a single front door at Xbox for licensing deals. That could speed up projects that previously had to work through individual game studios.

Employees. Cybernews describes 2026 as a year of mass layoffs and restructuring at Xbox. A new division signals investment in one area, but it does not undo cuts elsewhere.

What it means for gamers' wallets

XP itself does not change what you pay to play. The price changes around it do. If you use Xbox cloud gaming, check which plan you are on before the new monthly hour limits arrive in November. If you have been thinking about new hardware, consider whether a PC or a handheld fits your habits better; our handheld gaming PC guide covers what to check before buying one.

Xbox also addressed one rumor this week. According to Cybernews, Xbox chief strategy officer Matthew Ball said *Grand Theft Auto 6* "will not be streaming exclusively or to PC," pushing back on reports about streaming exclusivity.

What to watch next

The first real test of XP will be its project slate. No specific new films, shows or attractions were announced alongside the division, according to Thurrott and Cybernews. Watch for:

1. A Minecraft movie sequel or spinoffs. The first film's box office makes it the most obvious next step.
2. More Fallout and other franchise adaptations. Microsoft owns a long list of worlds that have never had a screen version.
3. Location based deals. Theme park partnerships take years, but even a first announced deal would show how serious Xbox is about "Places."
4. Merchandise and brand tie ins. These are the fastest way for XP to show revenue.
5. Leadership stability. Xbox has gone through a major reset. Whether the new team stays in place long enough to see projects through will be telling.

Big tech companies keep looking for growth beyond their core products, and Xbox is now joining that trend in a very public way. For more stories like this, visit our tech section.

Frequently asked questions

What is the Xbox XP division?

Xbox XP is a new unit announced on October 8, 2026, that oversees Xbox film and TV adaptations, merchandise, brand partnerships and live or location based experiences such as events and theme parks.

Who leads Xbox XP?

Kayleen Walters, the former president of Mojang Studios, leads XP and reports to Xbox CEO Asha Sharma.

Who is the new head of Minecraft?

Maria Angelidou-Smith, previously chief product officer at Reddit, is the new CEO of Mojang and Minecraft.

Does Xbox XP change anything for players today?

Not directly. No new projects were announced with the division. Separate changes, like cloud gaming hour limits starting in November, will affect some players sooner.