This is how Overwatch's SR system works
Your competitive rank in Overwatch is determined by your Skill Rating. There are plenty of factors that are considered, however, when determining a person's SR—most of them are kept secret.
Once you've completed your placement matches, you'll be placed within a skill level based off your SR. Bronze players have an SR from 1 to 1,499. Silver players sit between 1,500 and 1,999 SR. Gold players have an SR between 2,000 and 2,499, while platinum players have 2,500 to 2,999. For diamond, your SR must be between 3,000 and 2,499. Masters players sit between 3,500 and 3,999. Grandmaster players will have an SR above 4,000.
After being placed, players gain and lose SR based on performance. Losing a game will likely cause you to lose SR. Winning games, of course, will earn SR.
But what determines just how much SR is earned or lost?
It's a mixture of things. "While both the 'On Fire' system and the matchmaking system attempt to track your underlying performance, the amount of time you spend 'on fire' does not directly affect your SR adjustments after a match," Overwatch principal designer Scott Mercer told Kotaku. "There is some amount of correlation between the two systems, but no direct link. We can make changes to one without affecting the other."
But that doesn't mean being on fire is pointless. It's not. Being on fire means that you've been doing pretty well in a game. Doing well in Overwatch bumps up your SR gain, however.
To get really significant SR gains, though, you'll have to have consistent wins in Overwatch. Going on win streaks will boost the amount of SR earned with each win, which allows you to even out at your true skill, especially during the first few matches after placements.
Blizzard typically places its Overwatch players a bit lower than they were in previous seasons as a way to ensure players feel good about their wins, rather than being placed too high and losing a ton.
"A lot of game designers make trade-offs between varying goals that sometimes work at opposites," Mercer said. "This is one where we made the decision to lower you initially so, as you play, you have a more positive experience."
Losing streaks don't stack, however. "Repeated losses used to mean your SR would drop even more, but we recently reduced the effects of streaks so they don’t accelerate your SR adjustment," Mercer told Kotaku. "Sometimes a player does have a bad streak of losses, and that’s actually pretty natural. You might be temporarily distracted by something outside the game, you’re learning a new hero, or you are just simply unlucky for a time."
Regardless of what many players think, Blizzard actually does a really good job of calculating skill. Sure, it feels bad to be placed lower than you think you deserve, but if you're really a diamond player, you'll get there eventually.