Blizzard has closed out its strongest year under the Xbox umbrella, and the credit goes to two titles: a hero shooter many had already written off, and a dungeon crawler that keeps outlasting its own scandals.
The details come from internal emails attributed to Blizzard president Johanna Faries, which leaked after a bruising Xbox earnings report. The gist of what she told staff was that the studio is firing on all cylinders.
“In FY26 Blizzard ended the year as the top-performing studio in Xbox's studios division,” Faries’ leaked emails stated, “and this past year has marked our third highest fiscal for top line revenue in Blizzard’s history.”
The streak nobody expected to break
According to Faries, FY25 and FY26 also represent the studio’s “first back-to-back years of growth since FY17.” That is worth pausing on. Blizzard went close to a decade without managing two consecutive growth years, and the run ended thanks to a pair of games.
The World of Warcraft maker is sitting on an enormous library of IP. Even so, it was Overwatch and Diablo 4: Lord of Hatred that “drove exceptional performance.”
Lord of Hatred arrived in April of this year as the second DLC expansion for 2023’s Diablo 4. On top of the action-RPG’s existing foundation, it layered in additional story content, a fresh region, and the Paladin and Warlock classes.
Diablo takes the hits and keeps selling
Diablo has had a rocky relationship with its player base for years now. Even so, and even through its most contentious moments, it remains one of Blizzard’s biggest earners.
Overwatch makes for the more compelling case study. The hero shooter’s fortunes have swung dramatically over the 10 years since it launched, yet the studio’s recent run of work suggests Blizzard isn’t satisfied with simply keeping the lights on.
That turnaround began in 2025 with loot boxes making a comeback alongside the new perk system. In 2026 the “2” was dropped from the title altogether, 10 new heroes landed across the year, and a stack of quality-of-life updates shipped.
By Faries’ reckoning, the work has paid off. Overwatch has just recorded “its strongest quarter since 2022.”
What comes next is still under wraps
These wins, Faries said, will help “shape Blizzard’s future.” Precisely what that future holds is still largely a mystery outside the company.
Reports point to mobile spinoffs and trans-media projects built around several of its franchises, with the next mainline Diablo project said to be moving forward. None of it has been officially announced. BlizzCon 2026 runs September 12 to 13, 2026, making it the natural stage for a reveal.
“It’s my hope that the event can shine a light on the work underway at Blizzard,” the email continued, “and that it can serve as a powerful springboard into a new era of momentum and excitement behind our mission to bring joy and belonging for communities worldwide.”
The company around it is having a much worse year
Blizzard’s upbeat news lands inside a division enduring a historically bad stretch. Xbox also owns Call of Duty, Fallout, The Elder Scrolls and Halo, and none of those has cushioned the blow.
CEO Asha Sharma pledged to “reset” the brand. Since then, Microsoft has announced layoffs that will hit 3,200 staff by the time they’re finished.
With the company offloading gaming studios and attempting to refocus on its core IP, the internal atmosphere isn’t hard to read. An id Software developer went on record accusing executives at the company of a failure to “fundamentally don’t understand art.”
Blizzard’s celebratory email therefore comes with an asterisk attached. Topping the studio rankings in a division shedding 3,200 jobs is an odd sort of trophy.