Blizzard Is The ‘Top-Performing’ Xbox Studio, Reveals Internal Email

Blizzard has reportedly become Xbox’s top-performing studio after exceeding Microsoft’s internal expectations for the 2026 fiscal year.

The claim comes from an internal email that Blizzard president Johanna Faries reportedly sent to staff at the end of Microsoft’s fiscal year, which runs from July 1, 2025 to June 30, 2026. According to Windows Central, which obtained and verified the email, Faries told staff that “in FY26 Blizzard ended the year as the top-performing studio in Xbox’s studios division, and this past year has marked our third highest fiscal for top line revenue in Blizzard’s history.”

That is a notable result for a company Microsoft only acquired through its wider Activision Blizzard purchase in 2023. Blizzard’s games have since become an increasingly important part of the Xbox ecosystem, even as the publisher continues releasing major titles across competing platforms. Diablo 4, for example, expanded to Steam in October 2023, several months after its initial Battle.net and console debut.

Diablo And Overwatch ‘Overdelivered’ For Xbox

Faries specifically credited two franchises for the turnaround, saying that:

Diablo 4: Lord of Hatred and Overwatch drove exceptional performance in particular, with Overwatch delivering its strongest quarter since 2022.”

She added that fiscal years 2025 and 2026 were Blizzard’s “first back-to-back years of growth since FY17,” a stretch that also spans Overwatch’s original 2016 launch and the game’s rockier stretch following the Overwatch 2 launch. Microsoft has not released public figures comparing every individual Xbox studio, so it remains unclear exactly which metrics beyond revenue factored into the ranking.

Diablo and Overwatch both operate as long-term platforms supported by seasonal updates, cosmetics, expansions, and recurring player engagement. That model can generate considerably steadier revenue than relying exclusively on new premium releases.

Diablo 4 has followed that strategy since launch, receiving frequent balancing updates and seasonal content. Its earlier Season of Blood patch introduced extensive gameplay changes, establishing the broader update cycle Blizzard continues to use ahead of Lord of Hatred.

A Major Win, But Details Remain Limited

Faries framed the results as validation for continued investment, telling staff the success would help Blizzard put more resources into its games, its people, and initiatives that will “shape Blizzard’s future.” The news arrives alongside Blizzard’s preparations for BlizzCon 2026, set for September 12 in Anaheim, which Faries said she hopes will serve as “a powerful springboard into a new era of momentum” for the studio.

Still, “top-performing” needs some context. The internal email offers a strong indication that Blizzard exceeded Microsoft’s targets, but it is not a substitute for public financial data detailing each Xbox studio’s performance. It also arrives against a difficult backdrop for Xbox overall, which finished the fiscal year down 11%, and amid ongoing rounds of layoffs and studio closures across the wider division.

Even with that caveat, the takeaway is difficult to miss: Blizzard is already delivering substantial value for Xbox. The real question is whether Microsoft can maintain that momentum without undermining the franchises and communities responsible for it.