An internal email has revealed that one of the Redmond-based tech giant’s major acquisitions has proved beneficial for Microsoft in the medium term.

According to a leaked email, Blizzard Entertainment, the studio behind StarCraft, Warcraft, Diablo and Overwatch, has just finished the third most profitable year in its history. In the email, Blizzard president Johanna Faries reportedly praised the team for closing the 2026 fiscal year as the top-performing studio within the Xbox studio division.

She wrote that Diablo IV: Lord of Hatred and Overwatch in particular had contributed to this exceptional performance, with the latter achieving its strongest quarterly result since 2022. She added that Overwatch has grown for multiple consecutive years for the first time since its launch and that this year’s BlizzCon should serve as a massive springboard into a new, dynamic era. While Blizzard appears to have been less severely affected by the Xbox “reset”, which involved 3,200 layoffs, than companies such as Double Fine and ZeniMax, a significant number of layoffs are still expected.

There are countless rumours about what to expect at the next BlizzCon, which will be the first edition of the formerly annual event series since 2023. There is also endless speculation about a StarCraft shooter and a revamped sequel to World of Warcraft Classic. However, all these major events, as well as side projects such as the WoW and Dungeons & Dragons crossover, seem to come with a big asterisk, as unresolved turmoil at Microsoft still looms large.

It is clear that Xbox will rely on the studio to improve its mediocre financial results while attempting to return to growth by the 2027 financial year – just two years after the acquisition of Activision Blizzard King resulted in the loss of 1,900 jobs and the cancellation of at least one major game.

The situation does not seem too bad, but it is still worth being cautious: there could be layoffs if even a single project goes wrong.

Source: PCGamer, Windows Central