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.