Background/Objectives: This study aimed to compare the effects of Xbox Kinect Sports (XKS) relative to an inactive control group (CG) on cognitive status and physical performance in physically inactive older females. Methods: A randomized controlled trial study was conducted with the following groups: XKS (n = 15) and CG (n = 15), considering three weekly sessions of 60 min for 24 weeks. A two-way mixed analysis of variance with repeated measures was performed. Results: A two-way mixed ANOVA revealed significant time × group interactions for the Mini-Mental State Examination (MMSE) (F(2,18) = 14.8, p = 0.000, ηp2 = 0.292, large effect), Timed Up-and-Go (TUG) (F(2,18) = 19.5, p = 0.000, ηp2 = 0.351, large effect), and Falls Efficacy Scale-International (FES-I) (F(2,18) = 6.55, p = 0.015, ηp2 = 0.154, large effect). No significant interactions were observed for the Berg Balance Scale (BBS) (F(2,18) = 0.998, p = 0.324, ηp2 = 0.027, small effect), Maximal Isometric Handgrip Strength (MIHS) (dominant: F(2,18) = 0.163, p = 0.688, ηp2 = 0.005; non-dominant: F(2,18) = 0.012, p = 0.912, ηp2 = 0.000, small effects), or Maximal Isometric Pinch Strength (MIPS) (dominant: F(2,18) = 0.099, p = 0.756, ηp2 = 0.003; non-dominant: F(2,18) = 0.233, p = 0.632, ηp2 = 0.006, small effects). Conclusions: XKS significantly improves cognitive status measured by the MMSE and physical performance through reduced time in TUG and fear of falling through the FES-I in physically inactive older females.