Finally some good news for fans eagerly awaiting the third installment of Blizzard's Diablo series. During Activision's earnings call today, Blizzard CEO Mike Morhaime revealed that the developer has started company-wide testing for the upcoming game, but more importantly he said that external beta testing is scheduled to begin in Q3 2011.

Considering that BlizzCon was announced to take place on October 21-22 it's likely that the beta will launch towards the end of the quarter. BlizzCon is a celebration of the global communities surrounding Blizzard's Warcraft, Diablo, and StarCraft game universes, thus it would be a logical venue for them to announce that the beta is ready to go. There is no official release date yet but the company says it is pushing hard to get the game ready before end of the year.

Diablo 3 takes place in Sanctuary, the dark fantasy world of the series, twenty years after the events of Diablo II. Like its forerunner, Diablo III combines dungeon roaming with hack and slash action, and will introduce several new dimensions to the gameplay as well as a brand-new 3D graphics engine with new visual effects and Havok physics.

Unlike most potion heavy titles in the genre, players will collect orbs from fallen enemies to regenerate health. There will be five character classes (and you'll actually be able to select your gender), including the Barbarian, Witch Doctor, Wizard, Monk, and Demon Hunter - which was shown off at last BlizzCon. Diablo III will also take advantage of the revamped, which rolled out last year alongside StarCraft II.