Xbox is betting its future on movies, merchandise, and theme parks after a turbulent year of layoffs. The new XP division aims to turn game IP into a global entertainment empire, but can it work when the core business is struggling?
The Bold Move
On Thursday, Xbox made a stark announcement. They are creating a new division called XP to push their video game brands into movies, TV, merchandise, and live events. This happens while the company bleeds money and cuts jobs. They want to ride the wave of hits like A Minecraft Movie and the Fallout TV series to build a massive entertainment empire.
Matthew Ball, the Chief Strategy Officer, told CNET they want to be the number one entertainment company on the planet. XP, short for experience points, will run four departments: Xbox Pictures, Xbox Products, Xbox Places, and Xbox Partnerships. This setup handles everything from film deals to theme park events and brand collabs.
Leadership Changes
CEO Asha Sharma tapped Kayleen Walters to lead the new XP division. Walters was the executive producer on A Minecraft Movie, which made $424 million in the US last year. She is now working on the sequel, A Minecraft Movie Squared, due in July 2027. Her background at Lucasfilm on Star Wars marketing adds weight to her new role.
Sharma also named Maria Angelidou-Smith as the new head of Mojang and Minecraft. Angelidou-Smith comes from Meta, where she was a VP, and served as chief product officer at Reddit. These moves show a serious push to squeeze more value out of their top intellectual properties in the entertainment space.
Financial Context
The financial picture is grim. Revenue fell by $1.7 billion, or about 7%, between July 2025 and June 2026. In July 2026, Sharma announced a massive restructuring that will cut 3,200 jobs by mid-2027. They call it the biggest reset in Xbox history, and it has already moved four studios under new management.
Dan Rayburn, a streaming media analyst, thinks this pivot is smart. He argues that Xbox needs to reach beyond its core gaming audience to stay competitive in a shifting entertainment market.
Upcoming Adaptations
Xbox has only adapted a handful of its hundreds of games for screen. Minecraft, Fallout, and Halo stand out. But more are coming. CNET reports that Call of Duty and Gears of War movies are in the works, and Netflix is producing an animated Diablo series.
These projects mark a huge step up for Xbox in entertainment. The box office success of A Minecraft Movie and the buzz around Fallout prove that game properties can sell to a wider audience.
The Challenge Ahead
This is a risky bet, especially with the core gaming business wobbling. Xbox has to balance spending on new IP adaptations with the need to fix its game development pipeline. If they want this to work, they need to tell stories that appeal to non-gamers, not just fans.
The XP division has a lot to manage. Films, live events, and products all need attention. Whether this strategy pays off or drains their resources is still up in the air.
Industry Reaction
Analysts are keeping a close eye on how this plays out. The entertainment world is crowded. Standing out takes more than just creative ideas; you need strong marketing and distribution. Xbox’s gaming background might give them an edge in creating immersive cross-media experiences.
Players are wondering how this shift affects game development. Will Xbox prioritize its biggest franchises for adaptation, or focus on newer titles? The answers will shape the company’s future and its bond with the gaming community.
Frequently asked questions
Keep subscribing to Quillon MarshHer next filing reaches you the moment it publishes, on her own subdomain.
Subscribe