Microsoft unveiled a new entertainment arm called the Xbox XP division on October 8, 2026, to steer its growing roster of film, television, and theme park projects. The business group brings together creative teams that previously operated across separate departments under former Mojang Studios president Kayleen Walters [2]. Rather than developing new software, the unit will adapt established gaming franchises into screen adaptations, live attractions, and consumer products [4].
How the Xbox XP Division Is Structured
The newly formed structure gathers several distinct media efforts under a unified organization focused entirely on experiences outside traditional gameplay. Xbox chief strategy officer Matthew Ball explained in an official blog post that the organization formalizes four separate investment areas: Xbox Pictures, Xbox Products, Xbox Places, and Xbox Partnerships [4]. Xbox Pictures will guide film and television adaptations. Xbox Products oversees consumer merchandise and licensing agreements. Meanwhile, Xbox Places will manage live broadcasts, conventions, and location-based attractions, while Xbox Partnerships works with outside creators, brands, and communities to develop sponsorships, promotional tie-ins, and shared brand experiences [2, 3].
Unifying these groups gives outside entertainment partners a clear contact point. In his post, Ball wrote that core games stay at the center of the company’s business: “Great games remain at the center of these franchises and at the heart of XBOX”. He added that the team will collaborate with in-house developers and trusted production partners to build fresh experiences for audiences around the world. It’s a structure designed to translate gaming worlds into broader entertainment without pulling game studios away from their regular release schedules [4].
Live gaming conventions will also move under the new banner. Fan gatherings like BlizzCon and Minecraft Live now belong to the Xbox Places portfolio, giving the unit oversight of in-person community events. The move means the company can coordinate global broadcasts and stage presentations under the same leadership that oversees Hollywood adaptations [1, 3]. It isn’t just about movies and television shows, since live attractions and competitive arenas share similar audience demands [1].
Kayleen Walters Takes Charge of Adaptations
To lead the new enterprise, Microsoft picked Kayleen Walters, who spent eight years directing franchise development at Microsoft while working on Minecraft. Walters brings a deep entertainment background from earlier roles in Hollywood. She spent 13 years at Lucasfilm, where she rose to vice president of franchise marketing and integrated planning, and she also held positions at film studios MGM and Universal [2, 3]. In February, Walters stepped in as head of Mojang Studios after Åsa Bredin stepped down to “focus on personal goals outside of work”. Her move to the adaptation branch opens another leadership transition at Mojang [2].
Walters will hand over leadership of Mojang Studios to Maria Angelidou-Smith, who previously served as chief product officer at Reddit and spent nearly a decade at Facebook [2]. Angelidou-Smith officially starts on October 19th. She will serve as CEO of Mojang and Minecraft [4]. Both executives will report to Sharma [3]. Sharma explained that the studio wanted someone who had built consumer products for large communities and understood how creators, technology, and monetization connect. The executive change ensures that the block-building game keeps a steady hand at the helm while Walters pivots to film and television sets [2].
In an internal memo sent to employees, Sharma praised Walters for knowing how to bridge gaming culture and outside media. Sharma wrote that Xbox franchises “mean more to people than the time they spend playing them, and Kayleen knows how to build those experiences with the industry without losing what made people care about the franchise in the first place”. She pointed out that adapting popular games calls for genuine care toward player communities. That balance hasn’t always been easy to strike in past video game adaptations, but leadership hopes Walters’s background will keep projects grounded [2].
Major Projects Under the XP Division
The XP division already oversees a growing roster of film and television productions. Chief among them is the follow-up to A Minecraft Movie, titled Minecraft Squared, which has been greenlit for release on July 23, 2027 [2, 3]. Walters served as executive producer on the first film. The first movie earned $550 million. That box office total arrived after just ten days in theaters in 2025. Translating blocky worlds into cinema proved lucrative, so the company quickly scheduled the sequel for theaters [2].
On the small screen, the team is managing the third season of Prime Video’s live-action Fallout series [4]. The television show turned into a big audience hit for Amazon and lifted engagement across older games in the catalog, even boosting player numbers on mobile title Fallout Shelter. That positive reception stands in contrast to the Halo series on Paramount+. Paramount canceled the show in 2024. It had lasted for two seasons. It’s a reminder that gaming adaptations don’t always succeed without the right creative fit [2].
Beyond Minecraft and Fallout, several other projects are moving forward under the new branch. A live-action Call of Duty film and an animated Diablo series for Netflix are in development, together with a Gears of War feature film at Netflix that will “tell the origin story of Delta Squad” [2, 4]. The unit is also collaborating with video game creator Hideo Kojima on Physint, an action-adventure stealth game that blends interactive gameplay with film, television, and music. Sony dropped the game earlier this year. Xbox then stepped in to back the title. These projects show that Microsoft won’t limit itself to standard video game sequels as it looks for growth [3].
Theme Parks and In-Person Experiences
The XP division isn’t limiting its work to home screens and movie theaters [1, 2]. Location-based entertainment makes up another pillar of the initiative through the Xbox Places group [2, 3]. The centerpiece of this effort is Minecraft World, an attraction planned to open at the Chessington World of Adventures theme park in the United Kingdom in 2027. Microsoft entered an agreement in 2024 with park operator Merlin Entertainments. Merlin is funding two themed areas with an investment topping $110 million. Building real-world attractions offers players a way to step inside virtual sandboxes [2].
Walters played a key role in shaping the park agreement before taking on her new division responsibilities. When the partnership was announced, she pointed out the complementary strengths of both companies: “We are everywhere digitally, Merlin is everywhere physically. It’s about how do we expand Minecraft beyond the game. Mojang and Microsoft are experts on Minecraft and the brand, Merlin are the experts on location-based experiences; it’s a shared vision”. Physical attractions give families a shared environment to celebrate the game together [2].
By grouping themed attractions under Xbox Places, the company can align amusement parks with upcoming theatrical releases. If a child visits a Minecraft ride in 2027, that trip will arrive around the same window as the theatrical premiere of Minecraft Squared [2, 3]. Having a single team manage merchandise, park rides, and movie premieres prevents mixed messaging across different markets [3, 4]. It gives the publisher a way to connect digital fandoms with tangible experiences that can last for years [2, 3].
The Wider Reset Across Xbox Studios
The birth of the XP unit comes during a period of deep change across Microsoft’s gaming business. Xbox CEO Asha Sharma introduced a company-wide restructuring earlier this year that cut roughly 3,200 positions across the gaming organization and resulted in the closure or divestment of five internal studios [2, 4]. Since taking over leadership in February, Sharma has adjusted internal studio structures across the company. She placed Activision in charge of the Halo franchise. While teams continue managing seasonal schedules and departures from the active Xbox game catalog, leadership is placing heavier emphasis on non-gaming revenue streams [2, 4].
This isn’t the first time Microsoft has attempted to launch a dedicated entertainment division. In 2012, the publisher established Xbox Entertainment Studios to create original film and television series based on its video game brands. That initiative struggled to find momentum and was shut down just two years later. Industry veterans remember that earlier experiment, which makes today’s announcement feel familiar to longtime observers who wonder whether the new unit will avoid similar pitfalls [4].
Outside commentators have raised questions about what the company will look like once the dust settles. Writing about the transition, GamesIndustry.biz contributing editor Rob Fahey questioned the long-term plan: “Nobody has yet deigned to outline a clear vision for what Xbox will actually look like after this reset” [2]. Sharma has told employees that building media plans for franchises across film, television, consumer products, and live events is central to the reset. Whether the XP division can turn that vision into lasting success will depend on how effectively it balances beloved gaming lore with Hollywood production realities [2, 4].
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- ONLINE NEWS Hicks, J., & Packwood, L. (2026, October 8). Xbox announces new XP division to deliver transmedia spinoffs including film, TV, and theme parks. GamesIndustry.biz. [Article Link]
- ONLINE NEWS Valentine, R. (2026, October 8). Xbox is building a film division, and it’s putting Minecraft in the driver’s seat. Kotaku. [Article Link]
- ONLINE NEWS Peters, J., & Warren, T. (2026, October 8). Xbox is launching a new film and TV division. The Verge. [Article Link]
