Blizzard closed out its 2026 fiscal year as the highest-performing studio inside Xbox’s studios division, driven by Overwatch and the Diablo 4: Lord of Hatred expansion. Blizzard President Johanna Faries laid out the results in an internal email to staff, framing the year as proof that the studio’s long turnaround is finally showing up in the numbers.
Quick answer: In FY26, which ran from July 1, 2025 to June 30, 2026, Blizzard was Xbox’s top-performing studio and posted its third-highest annual revenue on record, with Overwatch and Diablo 4: Lord of Hatred cited as the main drivers.
Blizzard’s FY26 revenue and growth streak
Faries told staff that FY26 marked Blizzard’s third-highest year ever for top-line revenue. Just as notable, FY25 and FY26 were the studio’s first back-to-back years of growth since FY17, the year the original Overwatch launched. That gap says a lot about how uneven the past decade has been for Blizzard, with slumps in franchises like Warcraft and Overwatch keeping the studio from stringing together consecutive wins.
Two games did most of the heavy lifting. “Diablo 4: Lord of Hatred and Overwatch drove exceptional performance in particular, with Overwatch delivering its strongest quarter since 2022,” Faries wrote. Faries added that the results give Blizzard room to invest more in its games, hire more staff, and fund initiatives meant to shape the studio’s future, though the email didn’t spell out specifics.
| Detail | FY26 figure |
|---|---|
| Fiscal period | July 1, 2025 – June 30, 2026 |
| Ranking within Xbox studios | Top-performing studio |
| Revenue ranking in Blizzard history | Third-highest ever |
| Growth streak | First back-to-back growth years since FY17 |
| Named revenue drivers | Overwatch, Diablo 4: Lord of Hatred |
Overwatch’s rebrand and its best quarter since 2022
The standout line in the email is Overwatch posting its strongest quarter since 2022, the year Overwatch 2 launched. That’s a big swing for a game that spent years losing goodwill. Overwatch 2 replaced the original with a 5v5 format, heavier monetization, pricey skins, and a battle pass, then canceled the PvE mode that was supposed to justify the sequel. Combined with balance and matchmaking complaints, a lot of players walked away.
The reset came in February 2026, when Blizzard dropped the “2” and folded the game back into simply Overwatch. The relaunch brought five new heroes, a new storyline, reworked progression, hero sub-roles, and the return of loot boxes. Hitting its best quarter in over four years within roughly six months of that change makes the comeback hard to ignore. Exact earnings weren’t disclosed, but the email confirms Overwatch is once again one of the biggest financial performers across Xbox’s studios.
Diablo 4: Lord of Hatred’s role
The other pillar was Diablo 4’s second expansion, Lord of Hatred, which released in April. Alongside the expansion, Blizzard overhauled the game’s endgame loop, and the combination helped Diablo return to form after a rocky stretch for the franchise. Faries pointed to it as one of the year’s clearest reasons for the revenue jump.
World of Warcraft wasn’t named as a specific driver, which is a little surprising given the Midnight expansion arrived earlier in the year. The omission may simply mean its bigger moment is still ahead, with major WoW reveals expected at Blizzard’s showcase.
How Blizzard stacks up against the rest of Xbox
Blizzard’s strong year lands during a rough stretch for Xbox as a whole. Microsoft’s FY26 results showed Xbox content and services revenue down 10% year over year, with hardware revenue down 13%, and similar declines across the earlier quarters. The division also went through the “Xbox Reset” restructuring, which included roughly 3,200 layoffs and the departure of studios such as Ninja Theory and Undead Labs. About 1,600 of those cuts were immediate, with the rest planned through the following summer.
Against that backdrop, Blizzard’s growth stands out as one of the few clear bright spots from Microsoft’s Activision Blizzard acquisition. Now operating as a limited-integration entity within Xbox, the studio has been left largely untouched by the cuts so far. Xbox CEO Asha Sharma has said the division expects to return to growth by the end of FY27, which closes June 30, 2027.
BlizzCon 2026 and what comes next
Faries used the email to rally staff ahead of BlizzCon 2026, which returns to Anaheim on September 12. She said she hopes the event will “shine a light on the work underway at Blizzard” and act as “a powerful springboard into a new era of momentum and excitement behind our mission to bring joy and belonging for communities worldwide.”
Players can expect new announcements across World of Warcraft, Diablo, and Overwatch, along with community events. With two of its biggest franchises trending up and a marquee show on the calendar, Blizzard heads into the back half of 2026 as the healthiest part of a struggling Xbox lineup.