Microsoft’s Xbox division is expanding its presence in the entertainment industry with a new initiative aimed at turning more video games into movies, television series, merchandise, and live experiences. The company announced a new division called XP on October 8, 2026, following the success of A Minecraft Movie and the Fallout television series.

The move comes as Xbox looks for new ways to grow its business beyond gaming consoles and traditional video games. Through XP, the company plans to bring its popular gaming brands to a wider audience and create new opportunities across the entertainment industry.

Xbox Launches New XP Division to Turn More Games Into Movies and TV Shows

Xbox has a large collection of games, but only a small number have received major film or television adaptations. The new division will help the company expand these efforts and explore opportunities for more of its franchises.

Xbox XP Division Will Have Four Departments

The new XP division takes its name from “experience points,” a familiar term in video games. It will operate through four departments, each focusing on a different area of entertainment and brand development.

Xbox Pictures will focus on producing movies and television adaptations based on Xbox games. The department aims to bring more gaming franchises to film and television audiences.

Xbox Products will manage licensing and merchandise, allowing the company to expand its brands through products connected to its popular games.

Xbox Places will focus on live experiences and events. These could include activities at theme parks and other venues, as well as broadcast events that bring gaming communities together.

Xbox Partnerships will work with creators and other brands to develop new experiences based on Xbox properties.

Together, these departments will help Xbox explore opportunities beyond game development and reach consumers through different forms of entertainment.

Success of Minecraft and Fallout Inspired the Move

The success of A Minecraft Movie and the Fallout television series has demonstrated the potential of adapting video game franchises for other entertainment formats.

A Minecraft Movie generated approximately $961.2 million in worldwide box office revenue, making it a major commercial success. Its popularity also helped increase interest in the Minecraft game itself.

Following the movie’s release in 2025, Minecraft recorded a 75% increase in weekly active users, according to the reported figures. The results showed how a successful film adaptation can encourage viewers to explore the original game.

The Fallout television series also delivered positive results for the franchise. During the show’s first season on Prime Video, the number of hours players spent across Fallout games increased fivefold.

These results have strengthened the case for expanding established gaming franchises into movies and television. Such projects can introduce familiar characters and fictional worlds to people who may never have played the original games.

Kayleen Walters Appointed President of XP

Xbox CEO Asha Sharma has appointed Kayleen Walters as president of the new XP division.

Walters previously served as an executive producer on A Minecraft Movie and is also working as a producer on its sequel, A Minecraft Movie Squared. The sequel is scheduled to arrive in cinemas on July 23, 2027.

Before joining Mojang Studios in February 2025, Walters spent 13 years at Lucasfilm, where she led global marketing campaigns for the Star Wars franchise.

Her experience in film production and entertainment marketing could help Xbox identify gaming properties with the strongest potential for adaptation.

Sharma also announced that Maria Angelidou-Smith, a former Meta vice president and Reddit chief product officer, will become CEO of Mojang and Minecraft.

Xbox Looks Beyond Its Gaming Business

The XP announcement comes during a challenging period for Xbox. The company’s gaming business has faced revenue declines, layoffs, and major organizational changes.

Xbox hardware revenue fell by approximately $1.7 billion, or 7%, during the 2026 fiscal year, which ran from July 2025 through June 2026.

In July 2026, Sharma announced a major restructuring plan that included plans to lay off 3,200 employees by mid-2027 and move four studios out of Xbox and under new management.

Expanding into entertainment could help the company diversify its revenue sources while making its gaming brands more recognizable outside the gaming community.

Streaming services and film studios may also benefit from working with Xbox because established game franchises already have recognizable characters, storylines, and fan bases.

Not Every Xbox Game Will Become a Movie

Industry analyst Dan Rayburn believes the expansion makes sense because Xbox needs to reach audiences beyond its core gaming market. However, he also cautioned that not every game will translate successfully into a film or television series.

Some franchises may appeal mainly to gamers, while others could attract a much broader audience. Xbox will need to select its projects carefully and work with experienced entertainment professionals to develop adaptations that connect with viewers.

The company’s existing successes provide a strong starting point, but future projects will need to demonstrate their own appeal.

With XP, Xbox is taking a more organized approach to expanding its intellectual property across entertainment formats. If the strategy succeeds, more of its gaming franchises could eventually appear on cinema screens, streaming platforms, merchandise shelves, and at live events.