Microsoft is creating a new Xbox division called XP, designed to expand its gaming franchises beyond games and into movies, television, merchandise, live events, theme parks and brand partnerships.
The new group will be led by Kayleen Walters, the former president of Minecraft. Her experience includes more than a decade at Lucasfilm, where she worked across areas connected to Star Wars merchandise and theme park projects before later helping grow Minecraft beyond the game itself.
Microsoft now wants to apply a similar model to more Xbox properties, including franchises such as Fallout, Call of Duty and Candy Crush.
The plan reflects a broader effort to turn major Xbox intellectual properties into entertainment brands that can reach audiences even when they are not playing the games.
Xbox XP Will Be Split Into Four Main Areas
XP will operate through several teams, each focused on a different way of extending Xbox franchises beyond their original games.
| XP division | Main focus |
|---|---|
| Xbox Pictures | Movies and television |
| Xbox Products | Merchandise and licensed products |
| Xbox Places | Events and physical experiences |
| Xbox Partnerships | Collaborations with outside brands |
Xbox Pictures will focus on adapting gaming franchises for film and television.
Microsoft already has several projects in this area, including adaptations connected to Gears of War, Wolfenstein and Diablo.
Recent successes have given the company a clearer reason to invest further. The Minecraft movie and Fallout television series both attracted large audiences while also increasing interest in the games themselves.
Merchandise Could Expand Across More Xbox Franchises
Xbox Products will handle toys, collectibles, clothing and other licensed merchandise.
Minecraft is currently one of Microsoft's strongest examples of how a game can become a much larger consumer brand. Merchandise based on the franchise is widely available across toy stores and other retailers.
Microsoft wants to expand this strategy to more of its franchises.
The company says future products should feel authentic to the communities surrounding individual games rather than functioning as generic branded merchandise.
Walters' background makes her a natural choice for the role. She previously worked on similar opportunities around Star Wars and later helped oversee Minecraft's growth outside the game.
Theme Parks and Fan Events Are Also Part of the Plan
Xbox Places will focus on physical experiences.
That includes established events such as BlizzCon, but Microsoft is also considering how similar concepts could work across other Xbox properties.
Minecraft is already providing an early test. A physical Minecraft attraction is scheduled to open in the UK next year, and Microsoft could use its performance to guide future projects.
The company may eventually explore more experiences based on franchises from Blizzard, Bethesda, Activision and other Xbox studios.
This creates possibilities for themed attractions, conventions and other events built around individual gaming communities.
Xbox Partnerships Will Work With Outside Brands
The fourth part of XP will focus on partnerships.
Microsoft already works with companies outside gaming to bring Xbox brands into different products and promotions.
Recent examples include the IKEA Xbox furniture collection, promotional work involving Blizzard and McDonald's, and Fanta campaigns connected to Xbox Game Pass.
XP will bring these types of deals into a more coordinated structure.
Walters said the idea behind the division is that major gaming franchises have the potential to reach people through more than the games themselves.
Fans may watch adaptations, buy merchandise, attend events or interact with a franchise through collaborations with other brands.
Microsoft Is Following a Strategy Already Used Across Entertainment
The creation of XP comes as Microsoft looks for more value from the companies and franchises it has acquired over recent years.
The company has seen how successful adaptations can increase interest in games. Other franchises across the wider industry have experienced similar effects after successful television and movie projects.
There are risks, however.
A poorly received adaptation can damage the reputation of a franchise rather than strengthen it. Microsoft's Halo television series showed how difficult it can be to translate a major gaming property into another medium while satisfying its existing audience.
Microsoft has also tried a similar strategy before. Xbox Entertainment Studios was created more than a decade ago to develop original television content but was later shut down.
This time, the approach appears more focused on partnerships with experienced external companies rather than producing everything internally.
Microsoft is also changing Minecraft leadership following Walters' move to XP. A former executive with experience at Reddit and Meta is taking charge of Minecraft, with an emphasis on expanding it further as a development platform.
XP gives Microsoft a dedicated structure for turning Xbox franchises into broader entertainment businesses. Its success will depend less on the number of projects it creates and more on whether those movies, products, events and partnerships are good enough to strengthen the games they are built around.
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