Blizzard Becomes XBOX’s Top-Performing Studio in FY26

Blizzard has become one of Microsoft’s strongest gaming performers, finishing FY26 as the top-performing studio within XBOX’s studios division after years of uneven results.

Blizzard President Johanna Faries told employees that FY26 was the company’s third-highest fiscal year ever for top-line revenue. FY25 and FY26 also marked Blizzard’s first consecutive years of growth since FY17.

The results stand out as XBOX revenue overall declined 11% during the fiscal year.

Diablo and Overwatch drive Blizzard’s growth

Diablo 4: Lord of Hatred and Overwatch were among the biggest contributors to Blizzard’s performance.

Overwatch recorded its strongest quarter since 2022, helped by a greater focus on community feedback and a steady flow of new content.

Diablo has also improved, particularly through changes to its endgame systems and the Lord of Hatred expansion. Meanwhile, World of Warcraft continues to receive content at a more consistent pace, although concerns remain around writing and polish.

Blizzard plans further investment

Faries said Blizzard’s stronger financial position will allow the company to invest more in its games, employees, and future initiatives.

She described the recent growth as momentum that could help define Blizzard’s next era, particularly as the studio competes with major live-service platforms such as Fortnite and Roblox.

Blizzard stands out as XBOX cuts costs

Blizzard’s performance comes during a more difficult period for Microsoft’s wider gaming business.

Microsoft has already carried out layoffs across its gaming organization, affecting several XBOX studios, while further reductions are reportedly expected.

XBOX has also faced criticism over its reliance on major franchises including Call of Duty, Minecraft, and Candy Crush. Microsoft has acknowledged weakness in its console business, while incoming XBOX CEO Asha Sharma is expected to focus on improving that part of the company.

Despite those challenges, Microsoft remains confident that XBOX will return to growth, with Blizzard now positioned to play an important role in that recovery.

Via Windows Central