I run quite old hardware and received a karma NAS a couple of years ago that now have 2 TB of music and movies.
Do not quite understand the streaming way of doing things and wonder if running a Plex Media Server from my XBO would be an advantage.

My goto player is VLC I use it mostly with DVDs and MP3.

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I've never messed with Plex running on an XBOX in particular, so I can't comment as to that part, but I've run Plex on some basic PCs and I have several friends who run Plex on some device or another. And I have tons of experience with VLC, and like it fine.

As Media Center type apps go, I like Plex. Where it and similar apps shine as compared to VLC is how the index and display and facilitate organizing your media, where your collection of movies will seem and look more like your own Netflix or the like.

If you don't care about that, and would just as soon browse a folder with windows explorer and launch VLC to watch a single movie, VLC is awesome.

If you want to sit on the couch and browse your movies like you would via the Netflix interface, then Plex (and others) are orders of magnitude better than VLC.

Fwiw, I run JRiver Media Center on a little Intel NUC pc, with boatloads of media on NASs for those reasons, ease of use, managing a large collection, and because I specifically did NOT want to be launching individual files via windows explorer for my living room TV.

Different strokes and all. VLC is awesome, but Plex/etc do many more things, and better, which only matters if you care about those things.

I don't think Plex SERVER will run on the XBOX, but the xbox app will pull data/media from a plex server. it might have changed, quick googling didn't find that, but Android devices can 'announce as server' in recent builds - but it is kind of limited.

What kind of NAS? many NAS devices have a plex server plugin/program to be able to feed the client devices. If it won't work, you can run the server off a windows/linux PC & store the media on the NAS. you don't need a lot of horsepower if you don't transcode & the XBx-one should be able to play most formats without transcoding.

I run PMS (docker) on an UnRAID server & a Windows server (offsite fast internet for family/travel). I have 1500+ DVDs, a few TV series + music.
I use Firesticks & firetvs as my main clients, then android/IOS. Since I use slingTV for all TVs at home as well, the Plex/Sling/Firestick interface meshes nicely.

I haven't run PLEX off of my Xbox, but we have run it on the PS3 and on a Roku TV and it ran beautifully on both.

My HTPC front end and server is a lowly Core i3 with a whopping 8GB RAM. Works great, and I have a gazillion songs and tons of movies, etc.

I love Plex but have no idea about the Xbox. I originally had it running on a NAS (QNAP 431) but that box didn't have enough power to transcode everything, so I'm moving it to a real PC.

Running plex on a 2012 Mac Mini. No idea about xbox but plex will run on some low spec hardware, including (as mentioned) many NAS's.