While much of Xbox may be suffering due to lower year-on-year revenue in its latest quarter, a new report indicates that Blizzard might have been the “top-performing” developer under the division. According to Windows Central’s Jez Corden, an internal email by Blizzard president Johanna Faries congratulated the studio’s staff for its growth.
Faries kicked off her email by getting employees excited about BlizzCon 2026 on September 12th, noting that “the weekend will reflect the bold and collaborative work of everyone reading this. It’s my hope that the event can shine a light on the work underway at Blizzard, and that it can serve as a powerful springboard into a new era of momentum and excitement behind our mission to bring joy and belonging for communities worldwide.”
Further on, Faries said that, along with being the “top-performing studio” under Xbox, Blizzard also saw its third-highest fiscal performance when it came to Blizzard revenue throughout its history. Much of this was buoyed by the strong performance of free-to-play hero shooter Overwatch and the release of Diablo 4’s Lord of Hatred expansion earlier this year.
“FY25 and FY26 were our first back-to-back years of growth since FY17. Diablo 4: Lord of Hatred and Overwatch drove exceptional performance in particular, with Overwatch delivering its strongest quarter since 2022.” Further, Faries said that the revenue growth has helped the studio invest in developing more games and hiring more staff.
BlizzCon 2026 is expected to be a showcase for Blizzard’s upcoming titles, ranging from more content being developed for Diablo 4 and Overwatch, to potentially giving us our first look at World of Warcraft’s The Last Titan expansion. A few surprises are also expected, such as the much-rumored StarCraft third-person shooter, and potentially even a revival of some of the company’s older games, like the StarCraft or Warcraft strategy titles.
As for Xbox, Microsoft had revealed during its recent earnings report that the division saw its revenue fall by 10 percent year-on-year in the fourth quarter of FY 2026. This confirmation came shortly after the company had conducted sweeping layoffs across the entire division, affecting 1,600 jobs in the process. In announcing the layoffs, Xbox CEO Asha Sharma had also confirmed that 1,600 more jobs were planned to be cut before the end of FY 2027.
When it comes to Microsoft as a whole, however, the company has seen quite a bit of success thanks to the strong performance of businesses like Microsoft 365 and Azure. CEO Satya Nadella praised the former for having surpassed $100 billion in revenue for the first time, and praised the latter for seeing major growth when it came to paid users.
“We are advancing the frontier on the cost-to-outcome curve, ensuring every customer can turn tokens into business results. This year, Azure revenue surpassed $100 billion for the first time, and Microsoft 365 Copilot reached over 30 million paid seats, reflecting the confidence customers are placing in us to power their AI transformation.”
Sharma has also reportedly discussed Xbox’s plans to return to growth through an internal memo.
