Blizzard becomes most successful studio at Xbox division

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Blizzard Entertainment has concluded fiscal year 2026 as the top-performing studio within Microsoft’s Game Studios division. Windows Central obtained an internal email highlighting this achievement, which Blizzard CEO Johanna Faries later confirmed in a message to her team ahead of BlizzCon 2026, scheduled for September 12 in Anaheim. Faries reported that fiscal year 2026 marked Blizzard’s third-best revenue period in its history. She further noted that fiscal years 2025 and 2026 represent the first back-to-back years of growth for Blizzard since fiscal year 2017. The studio’s strong performance is largely attributed to Diablo IV and Overwatch, which have driven a two-year growth streak, ending a nearly decade-long period of stagnation. Specifically, Overwatch achieved its most successful quarter since 2022, a result of regular updates and a focus on audience feedback. The recent success of the Lord of Hatred expansion for Diablo IV was also a significant financial driver.

Blizzard Outpaces Rest of Xbox Division With Expansion Plans and New Game Projects

This success stands in contrast to the broader Microsoft Xbox division, which closed its fiscal year with an 11% decrease in revenue. The Xbox division is currently undergoing significant restructuring, including thousands of job cuts and the spin-off or sale of several studios such as Undead Labs, Ninja Theory, Compulsion Games, and Double Fine, alongside reductions at id Software. Top executives at Microsoft anticipate the Xbox brand will return to growth in the next fiscal year. Blizzard, protected from these layoffs due to its strong performance, plans to leverage its financial growth to increase investments in new game development, expand its team, and strengthen its position in the service games market. The company operates as an independent unit within Microsoft, separate from Activision. Johanna Faries serves as CEO of Blizzard. At BlizzCon 2026, Blizzard intends to unveil future projects. This event, the company’s first since 2023, will feature The Last Titan, the next expansion for World of Warcraft. Additionally, the convention will showcase new mobile game developments created with external partners and potential transmedia initiatives related to Blizzard’s game universes. Development continues on a third-person shooter set within the StarCraft universe, led by Dan Hay.

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