"FY25 and FY26 were our first back-to-back years of growth since FY17."
That line, buried in an internal email from Blizzard president Johanna Faries to staff, tells you everything about where the studio sits right now inside Microsoft's gaming empire. The email, which surfaced publicly this week, confirms that Blizzard closed out fiscal year 2026 as the top-performing studio in Xbox's entire studios division, and that the year ending June 30, 2026 ranked as the third-highest for top-line revenue in Blizzard's history.
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What the numbers actually mean for Xbox
Here's the thing: this news lands during one of the rougher stretches in Xbox's recent history. Xbox content and services revenue declined 10% in Q4 FY2026 compared to the same quarter a year prior. Hardware dropped 13%. New Xbox CEO Asha Sharma has publicly stated the expectation is for the division to return to growth by the end of FY2027. Against that backdrop, Blizzard being the one studio holding the line matters more than the headline suggests.
Faries didn't define exactly what "top-performing" means in terms of raw figures, but the context is clear enough. Blizzard's output combined, three major live-service games all generating consistent engagement and spending, outweighed every other studio under the Xbox umbrella. That includes Activision and its Call of Duty franchise, which had a rough year following the underperformance of Black Ops 7.
Diablo 4 and Overwatch did the heavy lifting
Faries named two games specifically: Diablo 4: Lord of Hatred and Overwatch. The Lord of Hatred expansion dropped in April 2026 and was well-received, adding a new class and pushing players back into the game in significant numbers. Overwatch, meanwhile, had its strongest quarter since 2022, boosted by a major overhaul earlier this year that dropped the "2" from its name and introduced five new heroes simultaneously.
That Overwatch rebrand wasn't just cosmetic. The game shifted toward a more story-driven direction and the hero drop was the largest single content addition the franchise had seen in years. Players responded. The "strongest quarter since 2022" stat is notable because 2022 was when Overwatch 2 originally launched, so matching that engagement level after the rocky years that followed is genuinely meaningful.
For context, World of Warcraft also released a new expansion this year and wasn't cited as a direct driver of growth, though the MMO quietly sustains millions of players on monthly subscriptions. WoW alone would be the anchor revenue source for most studios. For Blizzard it's practically the floor.
If you've been keeping up with Diablo 4's seasonal content, you'll know the picture isn't entirely clean. The Diablo 4 Season 14 tier list and best builds situation reflects a game that had some stumbles with its mythic item changes not landing well with players. The expansion carrying the year makes sense, the seasonal model has been more inconsistent.
Three live-service games running at once
The real question is why this took until FY26 to happen. Microsoft completed its acquisition of Activision Blizzard in October 2023. Blizzard becoming the top Xbox studio three years later, rather than immediately, says something about how long it takes for live-service games to build momentum post-acquisition and post-controversy.
Blizzard's position is genuinely unusual in the industry. Running three major live-service titles simultaneously, Diablo 4, Overwatch, and World of Warcraft, each with active player bases and ongoing monetization, is something almost no other studio pulls off at scale. Each game individually might not match a Call of Duty launch week or a Minecraft quarter. The cumulative weight of all three running in parallel is a different conversation entirely.
That been said, the studio has faced significant challenges over the past several years. The harassment and discrimination lawsuit that became public in 2021 damaged the brand, and the Overwatch 2 transition lost a chunk of the playerbase that never came back. Getting to back-to-back growth years for the first time since FY17 is a real milestone, even if it's one that comes with caveats about the competition shrinking around them.
BlizzCon is the next big moment
Faries framed BlizzCon 2026, set for September 12-13, as the natural springboard from this momentum. Her words: the event "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."
Beyond the expected expansion reveals for WoW, Overwatch, and Diablo, persistent rumors point toward a new StarCraft game being revealed. Specifically, an open-world shooter set in the StarCraft universe rather than a traditional RTS. That would be a significant departure for the franchise and a major announcement for a studio that hasn't launched a new IP in years.
Faries had previously stated that 2026 would be Blizzard's "biggest year yet" as part of the studio's 35th anniversary, and that she wants the company to be the "best gaming and entertainment company in the world." BlizzCon is where that ambition either gets substantiated or stays as executive-speak.
For players actively in Blizzard's ecosystem right now, optimizing your experience across platforms is worth the time. The Borderlands 4 PS5 and Xbox settings guide approach of dialing in console performance carries over to Blizzard titles on console too, particularly as Diablo 4 continues expanding its console audience.
The broader Xbox picture
Blizzard's rise to the top of Xbox's studio rankings happened partly because the field narrowed. Mass layoffs across the Xbox organization, studio closures, and spin-offs throughout 2024 and 2025 reduced the number of teams competing for that position. Tango Gameworks, Arkane Austin, and others were shut down or restructured. The studios that remain are carrying more weight.
That context doesn't diminish what Blizzard achieved, but it does frame it accurately. Blizzard earned its position through genuine performance from games players are actively spending time and money in. The studio isn't coasting on legacy. Overwatch's recovery and Diablo 4's expansion success are real results.
With BlizzCon weeks away and a possible StarCraft reveal on the table, Blizzard heads into the second half of 2026 with more momentum than it's had in nearly a decade. Keep an eye on our gaming guides section as BlizzCon announcements drop, because if a new game gets revealed, you'll want coverage fast.
