Blizzard decided to make Diablo V a standalone game because the return of Diablo as the main villain required a massive story that was difficult to implement in an expansion.
Executive Producer Matt Citterman said that the team first studied audience expectations:
Who are Diablo players? Why do they play Diablo? What do they want from a Diablo game?
When creating Diablo V, the developers also took into account feedback from Diablo IV players and concluded that “some deep structural changes” would be needed to achieve the desired result.
Diablo is the main villain. Diablo is who we want to tell a real story about. We want to tell a story that will be on par with the story of Lilith and Mephisto and, hopefully, surpass it, and doing that in an expansion was just wrong. We needed to give him his own game.
The plot of Diablo V will unfold after the Lord of Terror's victory: Sanctuary lies in ruins, and heroes travel in a caravan. Procedural dungeons, the Demon Hunter, and the Monk will return, and the new class will be the Plague Knight.
Diablo V will be released in spring 2029. Diablo IV will no longer receive paid expansions, but seasons will continue.