Microsoft is giving its Xbox franchises a bigger role in entertainment beyond video games. The company has announced XP, a new division that will bring together its efforts across movies, television, merchandise, brand partnerships, and live experiences under a single organization.

Announced on October 8, 2026, XP is designed to help Xbox reach audiences who may never pick up an Xbox controller, while giving existing fans more ways to engage with the worlds and characters they already love. The division consolidates capabilities that were previously spread across different Xbox teams, creating a more coordinated approach to developing its gaming properties into broader entertainment franchises.

The move reflects Microsoft’s ambition to make Xbox more than a gaming platform. Franchises such as Minecraft and Fallout have already demonstrated how video game properties can attract audiences through movies, television, merchandise, and other experiences. XP will bring these opportunities together rather than treating them as separate initiatives.

Xbox XP will focus on four areas

• Xbox Pictures
  Movies, television series, and other screen adaptations will bring Xbox’s fictional worlds and characters to audiences beyond gaming.
• Xbox Products
  This division will focus on licensed merchandise and consumer products that let fans express their attachment to Xbox franchises.
• Xbox Places
  Live events, immersive attractions, broadcasts, and other physical destinations will give fans opportunities to engage with Xbox communities outside their homes.
• Xbox Partnerships
  Collaborations with brands, creators, and communities will help develop new experiences and sponsorship opportunities around Xbox properties.

The structure gives XP a remit that goes well beyond producing movies and television shows. It also places merchandise, live events, and commercial collaborations under the same umbrella, allowing Xbox to approach its franchises as connected entertainment businesses. Microsoft says its existing game studios will remain central to that strategy, working with XP and external creative partners to develop new ways for audiences to experience their games.

Kayleen Walters will lead XP as Mojang gets a new CEO

Microsoft has appointed Kayleen Walters as XP’s president. She previously led Mojang, the studio behind Minecraft, and brings experience in franchise development, entertainment marketing, and consumer products.

Before joining Microsoft, Walters spent 13 years at Lucasfilm working on the Star Wars franchise. At Mojang, she helped oversee the growth of Minecraft into a larger entertainment property, including its merchandising business and its move into theatrical film. She also served as an executive producer on A Minecraft Movie and is involved in its sequel.

Microsoft’s announcement says Minecraft sales increased from 350 million copies to more than 425 million during Walters’ tenure at Mojang. The company also credits her leadership with helping grow the franchise’s global merchandising business. Those credentials make her appointment particularly relevant to XP’s mission: Minecraft already reaches consumers through products and entertainment experiences that extend far beyond the original game.

Walters’ move also brings a leadership change at Mojang. Maria Angelidou-Smith, previously Reddit’s chief product officer and an executive at Meta, will become CEO of Mojang and Minecraft. The appointments place both leaders under Xbox CEO Asha Sharma.

The success of game adaptations helps explain the timing

Xbox has already seen what can happen when a gaming franchise becomes a mainstream entertainment property. A Minecraft Movie performed strongly at the box office, while Amazon’s Fallout television adaptation has expanded the audience for Bethesda’s post-apocalyptic franchise. Microsoft specifically highlighted the film’s box-office performance and Minecraft’s growing merchandise business in its announcement.

Other projects show how broad that strategy could become. Xbox’s existing entertainment pipeline includes a sequel to A Minecraft Movie, a third season of Fallout, a Call of Duty film, and a Diablo animated series for Netflix, according to reporting from The Verge.

These projects span different audiences and formats, from live-action television to animated storytelling and cinema. XP gives Xbox a dedicated organizational home for this kind of expansion, although the announcement does not mean every franchise will receive a movie, a series, or a new consumer product.

That distinction matters. Adapting a successful game into another medium takes more than a recognizable name. The creative team must find a story that works for viewers who may have never played the game, while giving existing fans a reason to care. Microsoft’s stated approach is to keep the games at the center of each franchise while creating additional ways for people to connect with its worlds.

XP arrives during a broader Xbox reset

The new division is also part of a wider effort to reshape Microsoft’s gaming business. Xbox has been revisiting its priorities under Sharma, who became CEO in February 2026. The company has been working to improve the business while changing its development plans and organizational structure. Recent reporting has also highlighted layoffs and reductions to parts of Xbox’s game-development operation.

That creates a more complicated backdrop for XP. Expanding successful franchises into films, products, and live experiences could create additional commercial opportunities, but those businesses still depend on the games that make the franchises valuable in the first place. The new division’s success will therefore depend on whether it can expand Xbox’s reach without losing sight of the creative work and communities that sustain its properties.

There is also some history here. Microsoft previously established Xbox Entertainment Studios in 2012 to develop television and interactive entertainment projects, but closed it in 2014. XP has a broader stated remit, covering products, partnerships, and physical experiences as well as screen adaptations, so it is not simply a revival of that earlier studio. Still, its announcement is a reminder that Microsoft’s ambitions outside gaming have taken different forms over the years.

For now, XP is an organizational change rather than a promise of a specific slate of new releases. Its four investment areas establish where Xbox wants to grow, while Walters’ experience with Minecraft offers a clear example of the kind of franchise development Microsoft hopes to replicate.

The bigger test will be whether Xbox can turn more of its games into lasting entertainment properties without making the games themselves an afterthought.