There are couple of issues here, which I’d not necessarily expect to see on your PC.
Memory - that can be tracked with Windows Task Manager, would be good to see if it gets to dangerously high RAM usage while Xibo plays the video etc.
GPU - That can be hard to tell, can you play the same video in Windows Media Player without problems?
Perhaps update drivers etc? (unless it’s something hardware wise).
Location - I assume there is only one player installed on the PC? Is there some ‘aggressive’ anti-virus software type installed? Perhaps permission issue? You could try to have the library in the default location instead of desktop.
I assume player local library and CMS library are separate? (they must be)
This also brings me back to the question about how many players are installed on single PC?