Movies don't feel like events when they're streaming-only. There are precious few streaming-only movies that have become part of pop culture and draws by themselves years later. Theatrical is still needed for it to feel like a proper movie.

Not making this aa Christmas themes film with a mid December release will be an all-time big box office miss.

Christmas doesn't sell internationally. Barbie did $700M+ overseas, they won't risk a massive drop which is what would happen with a Christmas Barbie movie.