Blizzard is Xbox‘s top-performing studio for fiscal year 2026. That’s according to an internal email obtained by Windows Central. Blizzard president Johanna Faries told staff the studio just closed out its third-highest year for revenue in company history. She credited Diablo 4: Lord of Hatred and Overwatch as the main drivers.
Overwatch delivered its strongest quarter since 2022, Faries said. The shooter has grown for multiple consecutive years for the first time since it launched in 2016. That marks a turnaround from 2022, when Blizzard relaunched the game as the free-to-play Overwatch 2 following years of declining player counts. Faries told the team Blizzard finished the year as the “top-performing studio in Xbox’s studios division.” The framing reads as a morale boost after a difficult stretch for Microsoft‘s gaming business.
A top-performing studio despite Xbox’s layoffs
Blizzard’s results stand out against a rough period for Microsoft’s gaming division. Xbox cut about 3,200 jobs earlier this year as part of a wider restructuring. The cuts hit studios including Double Fine and ZeniMax. Blizzard has largely avoided those cuts so far, though a portion of the job losses across Xbox’s studios has yet to take effect.
Xbox is also a named target of the BDS movement, which pressures corporations over ties to Israel’s actions in Gaza. Microsoft has faced that pressure throughout the year. So far, it doesn’t appear to have slowed Blizzard’s financial results, at least according to the numbers in the leaked email.
The email arrives roughly two years after Microsoft completed its $68.7 billion acquisition of Activision Blizzard in October 2023. The deal folded Blizzard into Xbox’s roster of first-party studios alongside names like Bethesda and id Software. It also led to about 1,900 job cuts across the combined company and the cancellation of at least one unannounced game. Blizzard’s FY26 numbers are one of the clearer signs that the studio has stabilized since that turbulence.
What’s next for Blizzard
Faries pointed to BlizzCon 2026 as the next chance to build on the momentum. It’s the first edition of the convention since 2023, and she called it a “powerful springboard into a new era of momentum.” Fans have speculated for months about what Blizzard might announce there. The rumored list includes:
- A StarCraft shooter, discussed in leaks for over a year but never confirmed by Blizzard
- A remixed follow-up to World of Warcraft Classic, in the same vein as the original Classic relaunch
- World of Warcraft’s ongoing crossover event with Dungeons & Dragons
Each of those projects carries some uncertainty. Xbox’s broader restructuring is still working its way through the company, and not every studio under the Xbox umbrella has come through it intact. Numbers like these buy Blizzard leverage inside Xbox, giving Microsoft a reason to keep investing in the studio’s upcoming projects rather than trimming them back.
Microsoft’s FY27 targets now lean heavily on Blizzard repeating this performance. The company has said it wants its gaming division to return to growth by that point. That goal follows a stretch marked by layoffs and cancellations since the Activision Blizzard deal closed. BlizzCon 2026 will be the next public test of whether Blizzard can keep leading Xbox’s studios division.