You could have any number of notable characters from the 5 or so Fable games, e.g. Reaver, Hammer, Garth, Teresa, Scythe, Nostro, Scarlett Robe, Jack of Blades, Briar Rose, Whisper, Thunder, Weaver, Walter Beck, Page, Ben Finn, Major Swift, Captain Saker, Barry Hatch, a Balvarine, a Hobbe, Chesty, Lord Lucien, The Commendant, The Crawler, The Devourer, The Corrupter, Hero of Oakvale, Hero of Bowerstone, Hero of Brightwall, Hero of Southcliff, Gabriel, Sterling, Rook, Ingra, Winter, Shroud, Leech, and Glory.
Also M. Rossi from the Forza games, the Agents from Crackdown, Master Chief, Marcus Fenix, Clipit the Windows Paperclip, the dragon from Crimson Dragon, something from Kameo and probably many others.
There are probably more than enough Microsoft exclusive characters to make such a game if you think about it, but I'm not sure if a lot of the Microsoft exclusive characters would be suitable for such a game... it only takes Marcus Fenix to chainsaw in half Power Pup the Office Assistant for the fun to be ruined for everyone, whereas going the other way and reducing ultra-violent grizzled characters like Master Chief and Marcus Fenix to the family friendly levels of a Smash Brother clone and making them equal with the weakest, lest violent and capable character in Microsoft's line up, could damage those brands.