Blizzard just had its best year inside Xbox, and it got there on the backs of a hero shooter people wrote off and a dungeon crawler that keeps surviving its own controversies.
That’s according to leaked internal emails from Blizzard president Johanna Faries, sent to staff shortly after a rough Xbox earnings report. Her message to the studio was that Blizzard 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
Faries also confirmed that FY25 and FY26 marked the studio’s “first back-to-back years of growth since FY17.” Do the math on that. Nearly 10 years passed without Blizzard stringing together two consecutive growth years, and the drought ended because of two games.
The World of Warcraft maker sits on a mountain of IP. Only Overwatch and Diablo 4: Lord of Hatred “drove exceptional performance,” though.
Lord of Hatred, the second DLC expansion for 2023’s Diablo 4, launched in April of this year. It added more story content, a new region, and the Paladin and Warlock classes to the action-RPG’s foundation.
Diablo takes the hits and keeps selling
Diablo’s relationship with its audience has been messy for years. It remains one of Blizzard’s strongest performers anyway, through even its most controversial moments.
Overwatch is the more interesting story. The hero shooter has fluctuated wildly across the 10 years since launch, but the studio’s recent stretch of work suggests Blizzard isn’t content to just keep the lights on.
The rehabilitation started in 2025 with the return of loot boxes and the new perk system. Then 2026 dropped the “2” from the title entirely, added 10 new heroes for the year and shipped a pile of quality-of-life updates.
Faries seems to think the effort paid off. Overwatch recently posted “its strongest quarter since 2022.”
What comes next is still under wraps
Faries said the recent wins will help “shape Blizzard’s future.” What that future looks like largely remains a mystery to the public.
The company is reportedly working on mobile spinoffs and trans-media projects for some of its franchises, with work on the next main Diablo project progressing. Nothing has been officially announced. BlizzCon 2026 arrives September 12 to 13, 2026, and it’s the obvious venue 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 good news lands inside a division going through a historic rough patch. Xbox also holds Call of Duty, Fallout, The Elder Scrolls and Halo, and none of that has insulated it.
CEO Asha Sharma promised to “reset” the brand. Microsoft has since announced layoffs that will affect 3,200 staff when all is said and done.
As the company sheds gaming studios and tries to refocus on its core IP, the internal mood isn’t subtle. One id Software developer went public with the accusation that executives at the company “fundamentally don’t understand art.”
So Blizzard’s celebration email arrives with an asterisk. Being the top-performing studio in a division cutting 3,200 jobs is a strange kind of trophy.
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