Video game stocks have been on a tear in recent years, and Activision Blizzard (NASDAQ:ATVI) has leveraged its position to reap the rewards of that trend. With eight $1 billion franchises that cater to a wide variety of gaming tastes, the stock has gained nearly 20% in 2018, about 3.5 times the gains of the broader market, as represented by the S&P 500 index.

Activision is scheduled to release the results of its second quarter of 2018 after the market close on Thursday, Aug. 2. Let's take a look at the company's most recent quarter and review a few metrics that will be of interest to investors.

Exterior of Barclays Center

Image source: Activision Blizzard. 

More broken records?

Activision reported a number of records during the first quarter, including revenue, net bookings, and earnings per share, driven by record digital, mobile, and in-game revenue. This resulted in net revenue of $1.96 billion, up 13.8% year over year, and diluted earnings per share of $0.65, up 14% compared to the prior-year quarter. Net bookings -- which subtracts deferrals from net revenue -- increased 15% year over year to $1.38 billion. 

Those impressive results are expected to continue into the second quarter. Activision is forecasting revenue of $1.35 billion and adjusted earnings per share of $0.46. While long-term investors shouldn't be roped in by Wall Street's shorter time horizon, market forecasts can help to provide context around earnings. For their part, analysts' consensus estimates are calling for revenue of $1.4 billion, and adjusted earnings per share of $0.36. 

Other things to watch: a competitive threat, and a new revenue stream

Financial metrics aside, there are two big questions investors will have on their minds, one of which may present an earnings headwind.

The battle royale genre has been a phenomenon in the gaming industry. The two biggest beneficiaries of this trend are PlayerUnknown's Battlegrounds (PUBG), by privately-held PUBG Corporation, and Fortnite, by Epic Games, also privately held. These last-person-standing games have surged in popularity, causing much angst for the companies rushing to play catch-up.

Investors have been watching carefully for the fallout from Fortnite and its ilk, fearing the new game will siphon off sales from existing games -- something the major players in the industry have so far denied, pointing out that Fortnite is bringing new players into the fold. Expect Activision's management to provide an update on whether this latest the craze is taking a toll on its revenue.

On a more positive note, by the time you read this, Activision will be looking back on the inaugural season of the Overwatch League. The esports tournament was already enjoying a successful debut when the company announced an exclusive multiyear agreement with Disney and ESPN to televise the Overwatch League playoffs and Grand Finals -- beginning with this year's playoffs. The events will also be live-streamed on the ESPN and DisneyNOW apps.

Investors will be looking for updates on the completion of the Overwatch League's debut season and how its success will impact the company going forward.

Final thoughts

It's important to point out that the timing of the ESPN announcement shows the Overwatch League deal likely wasn't hammered out until after the completion of the quarter. The tournament's playoffs and finals both fell in the third quarter, so the agreement won't have any impact on Activision's second-quarter results.

Also, it's likely the company was being conservative when it issued its guidance for the quarter, in light of the uncertainties arising from the battle royale genre. Until now industry executives have been putting on a brave face, but eventually the companies -- Activision included -- will have to face the music.