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Blizzard is Microsoft’s “top performing” studio, thanks largely to Diablo 4 and Overwatch
Blizzard Entertainment has been named Microsoft's "top performing" Xbox studio, according to leaked internal emails reported by Windows Central, even as the wider Xbox division undergoes sweeping restructuring and job cuts. Blizzard President Johanna Faries credited the success largely to Diablo 4 and Overwatch, contrasting sharply with the turmoil affecting other Microsoft studios and offering a rare piece of good news within the company's games division.
Faries said Blizzard closed its fiscal year 2026 as Xbox's top-performing studio, recording its third-highest top-line revenue in the company's history, with Diablo 4: Lord of Hatred and Overwatch driving particularly strong results, the latter posting its best quarter since 2022. She also flagged the return of BlizzCon as a chance to showcase upcoming projects, though World of Warcraft was notably not mentioned despite this year's Midnight expansion. The news comes shortly after Microsoft announced 3,200 layoffs across its studios, with 1,600 taking effect immediately, and amid the ongoing BDS boycott linked to Microsoft's ties with Israel's military.
In short
- Blizzard named Xbox's top-performing studio despite wider Microsoft job cuts
- Diablo 4 and Overwatch drove Blizzard's third-highest revenue year
- Comes amid Microsoft's 3,200 layoffs and ongoing BDS boycott
Explained simply
Blizzard Entertainment is a video game studio known for series including Diablo, Overwatch and World of Warcraft. It is part of Microsoft’s Xbox division, which also includes other game studios and publishes games for Xbox consoles and PC.
Diablo is a fantasy role-playing series in which players fight monsters and collect equipment; Overwatch is a team-based shooter featuring characters with different abilities. Their recent games and updates are important sources of Blizzard’s sales and player activity, while World of Warcraft is a long-running online role-playing game with paid expansions.
Microsoft bought Activision Blizzard, Blizzard’s former parent company, in 2023, bringing the studio into Xbox. The wider division has since faced job cuts and restructuring, so Blizzard’s reported results sit within a larger period of change for Microsoft’s games business.