Depending on the size of your collection (or how much you want to rip), a NAS server is a good idea. There are several to choose from, just a little research on where to start and how much room you want to grow, etc... I went with a Synology NAS (DS 916+) and started with 4 3tb drives. Figure that should get the majority of my collection with a little room to spare (also putting all my photos and music on there). You can expect to spend anywhere from a few hundred to a couple grand to get started there.
For playback in my theater, I put Kodi on an Odroid C2. Total investment was probably $75. It connects to NFS share on the NAS, supports 4k and Atmos (not that I have any 4k movies yet, but...). Works like a charm.
Now, I also happen to have TiVos connected to pretty much every TV in my house, and TiVo happens to have a Plex app on it. So I also set up a Plex server on my PC, connected to the same shares on the NAS server, and now I have access to my collection from the theater as well as any TV in the house. Plus my Android devices, and if I really want, from anywhere in the world (I just haven't set up my firewall to allow Plex to go out yet). The trick with Plex is how much horsepower you need for the server, and it's really based on how many simultaneous streams might be going, and what quality video. In my case, it's just a couple streams, so my home PC has more than enough juice to do it.
I haven't looked at specs on the XBox X yet to know what it can connect to and stream from, or what video quality, etc... If it works, you're off and running.
I'd start by grabbing MakeMKV and rip a couple titles to your PC hard drive. To play them locally, something like VLC works great. Then you can set up shares and see if the XBox can connect (once you get it). Assuming your PC is a Windows box, they don't do NFS shares without a good bit of effort (or software), so you can start with SMB and see how it goes. Getting Kodi to see that can be a bit tricky, but there are some guides out there.