games
Blizzard Tells Staff FY26 Was Its Third-Best Year as Xbox’s Top Studio
Add Gaming.net to your preferred sources on Google
Blizzard ended its 2026 fiscal year as the top-performing studio in Xbox’s studios division, president Johanna Faries told staff in an internal email, with the year ranking as the third-highest for top-line revenue in the studio’s history.
Windows Central obtained and verified the email and reported it on August 9, 2026. The fiscal year in question ran from July 1, 2025 to June 30, 2026, matching Microsoft’s own reporting calendar.
“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,” Faries wrote. She added that fiscal 2025 and 2026 were the studio’s first back-to-back years of growth since fiscal 2017.
Faries named two drivers in the email. “Diablo 4: Lord of Hatred and Overwatch drove exceptional performance in particular, with Overwatch delivering its strongest quarter since 2022,” she wrote. Diablo 4’s second expansion, Lord of Hatred, launched in April 2026.
The internal account lands against a weaker backdrop for the division that houses Blizzard. Microsoft’s own fiscal fourth-quarter results, published July 29, 2026, showed Xbox content and services revenue down 10% year over year for the three months ended June 30, 2026, with the broader More Personal Computing segment that contains Xbox down 4% at $12.9 billion. Windows Central put Xbox’s full-year gaming decline at 11%.
What Faries credited
Two franchises carried the year, per the email. Diablo 4’s Lord of Hatred expansion and Overwatch were the named contributors, with Overwatch posting what Faries described as its strongest quarter in roughly four years. She told staff the results would let Blizzard invest more in its games and its people, along with other initiatives tied to the studio’s future, without specifying what those initiatives are.
The email also served as a rallying note ahead of BlizzCon 2026, which Blizzard has scheduled for September 12, 2026 in Anaheim, with Faries telling staff the event should put the work underway at the studio in front of its community.
Where Blizzard sits inside Xbox
The contrast Faries drew is between Blizzard and the rest of the Xbox studios group. While Microsoft reported record total revenue of $331.8 billion for the fiscal year, up 18%, the Xbox gaming line inside it moved the other way, with content and services revenue declining in the fourth quarter.
Blizzard operates with limited integration inside Xbox following Microsoft’s acquisition of Activision Blizzard, leaving it at more arm’s length from the platform holder than most first-party teams. Gaming.net has tracked the pressure elsewhere in that division, from thousands of job cuts and studio divestitures to a union labor charge over the layoffs and Game Pass falling short of its internal target.
For a studio that has seen what Faries called rises and falls over the years, the claim that carries the most weight is consecutive annual growth for the first time since fiscal 2017, a stretch that dates back to the period around Overwatch’s original 2016 launch.
