For all the doom, layoffs, strategy resets and general furniture-moving happening around Xbox, one part of Microsoft’s enormous gaming empire appears to be doing rather well.
Blizzard.
According to an internal company email verified by Windows Central, Blizzard ended Microsoft’s FY26 as the
top-performing studio in Xbox’s studios division.
Blizzard President Johanna Faries also told staff that FY26 was the company’s
third-highest fiscal year ever for top-line revenue.
Not bad for a studio that spent several years being discussed mostly in sentences containing words like “troubled,” “restructuring” and “what exactly happened here?”
Blizzard Has Now Grown for Two Years in a Row
The internal message contains another particularly interesting number.
Faries says FY25 and FY26 were Blizzard’s first consecutive years of growth since FY17.
That takes us all the way back to the period immediately following the original launch of Overwatch.
In other words, Blizzard has apparently managed something it hasn't done in almost a decade: put together two straight years where the business actually moved upward.
Faries specifically pointed to
Diablo IV: Lord of Hatred and
Overwatch as standout performers, with Overwatch reportedly delivering its strongest quarter since 2022.
World of Warcraft wasn't singled out in the same way.
But it doesn't exactly look like a passenger either.
WoW Has Become Extremely Consistent
Whatever you think about Midnight's individual systems, one thing is difficult to argue with:
Blizzard is shipping World of Warcraft content at an extraordinary pace.
Midnight launched in March.
Since then we've had major patches, smaller updates, new raid content, Delves, system changes and an aggressive seasonal schedule that now takes us directly into Patch 12.1 and Season 2.
We recently looked at
the debate around WoW's roughly eight-week update rhythm, because that pace isn't universally loved.
For some players, it is fantastic.
For others, Azeroth has begun behaving like a conveyor belt someone forgot to install an off switch on.
But from Blizzard's perspective, regular content keeps people engaged.
And engaged players are generally preferable to players who remember they own other games.
The Result Looks Even Better Because Xbox Is Having a Rough Time
Blizzard's performance stands out because the wider Xbox business hasn't exactly been enjoying a peaceful summer.
Microsoft has gone through major gaming layoffs, studio changes and restructuring, while Windows Central reports that Xbox overall finished the fiscal year down 11 percent.
Against that backdrop, Blizzard becoming the top-performing studio inside Xbox's studios organization is significant.
It also helps explain why Blizzard has largely avoided the most severe disruption seen elsewhere in Microsoft's gaming portfolio.
Success tends to make a very effective shield when corporate spreadsheets arrive.
Not an indestructible shield.
But definitely better than the alternative.
Microsoft Bought Blizzard at an Interesting Moment
When Microsoft completed its Activision Blizzard acquisition, Blizzard itself was still trying to rebuild confidence after years of internal turmoil and inconsistent releases.
Now the picture looks rather different.
Diablo is healthy.
Overwatch has found momentum again.
World of Warcraft is releasing content with a regularity that would have sounded slightly ridiculous during some previous expansions.
And BlizzCon returns in September.
That doesn't mean every Blizzard game is perfect or that every decision suddenly deserves applause.
It does mean the studio appears to have rediscovered something extremely useful:
Momentum.
Being Xbox’s Best Performer Changes the Conversation
There is a larger reason this matters to World of Warcraft players.
A Blizzard that is growing has considerably more freedom than a Blizzard constantly being asked to justify itself.
Successful games get investment.
Successful teams get opportunities.
Successful studios are much easier to defend when somebody at Microsoft asks which parts of Xbox need another round of “efficiencies.”
Faries told staff that Blizzard's recent performance should allow the company to invest further in its games, people and future projects.
For WoW, that doesn't guarantee anything specific.
No magical extra raid suddenly appears because a spreadsheet turned green.
But it certainly beats the opposite scenario.
After years when Blizzard frequently seemed to be searching for its identity, the company is now apparently Microsoft's strongest-performing Xbox studio.
A strange sentence.
But currently, a very good one to be able to write.
Source: Windows Central, citing internal Blizzard emails verified by the publication.
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