I can't use my hard drive to install Xbox games, it says it isn't formatted as NTFS even...

That's unfortunate to know. Marsvini_DK, may I know if you have more partitions created for this hard drive, or is just this “Harddisk (D” partition?

Additionally, if you review the partition folders, are you able to see the following folders: (or some of them)

WindowsApps

XboxGames

WpSystem

Can I create a new partition on my hard drive and just reformat that to the default settings?

It's worth a try. Just remember, the cluster size needs to be 4k.

Can I create a new partition on my hard drive and just reformat that to the default settings?

Hello Marsvini_DK, this is Manuela. I'm an Independent Advisor and community user like you, ready to assist with this.
Not a Microsoft employee.

Let's try to solve this, for this purpose, give the next a try:

Open the PC Settings > System > Storage > advance storage options > Where new content is saved.

Under “Apps”, click on the drop-down and select the drive.
Once selected, restart your PC and verify if you can install a new game on the Xbox app.

Hello Marsvini, please try deleting the WindowsApps folder from this drive.

Once deleted, select one more time the drive as where you're going to save new apps via PC Settings and then try selecting it on the Xbox app.

If the inconvenience persists, please try formatting the drive one more time.

Additionally, if you're not able to delete the folder, please take ownership of it by following the tutorial below:
https://www.windowscentral.com/how-take-ownersh...

This link leads to a non-Microsoft website. The page appear to be providing accurate, safe information. Watch out for ads on the sites that may advertise products frequently classified as a PUP (Potentially Unwanted Products). Thoroughly research any product advertised on the sites before you decide to download and install it.