Sideloading overview
Sideloading on Xbox One
Xbox One ships with an official Developer Mode that lets you load and run your own software without any hardware modification or exploit. Once your console is switched into Dev Mode, it exposes a small web-based control panel called the Device Portal that runs over your local network.
Through that portal you upload packaged apps directly from a browser on your PC. These packages use the universal UWP format, the same one Microsoft uses for Store apps, and arrive as .appx or .appxbundle files. After uploading, the app appears in the Dev Mode app list ready to launch like any other title.
Why people do this
The most popular use is running emulators. Projects like RetroArch, Dolphin, and PPSSPP have official UWP builds that install this way, turning the console into a capable retro machine, especially on the One S and One X.
Everything runs inside a sandbox. Each app is capped at 2 GB of installed size and cannot modify its own install folder, so games, ROMs, and BIOS files live on attached USB storage or in the app's own data area instead.
Switching into Developer Mode requires registering for the developer program and reformats your console. Back up anything important and read the managing and storage pages before you begin.