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Leadership Programs of Electronic Arts

es from Electronic Arts and its competitors as consumers wait until the new consoles are released.

These external considerations are causing Electronic Arts to be cautious about its performance during the current holiday season. Although the company increased its second-quarter earnings from 25 cents per share to 31 cents per share, since the earnings failed to meet analysts' expectations, the price of the stock fell. Thus the company is forecasting earnings of $1.11 to $1.21 per share on sales of between $1.4 billion and $1.48 billion while analysts are expecting profits of $1.27 per share on sales of $1.5 billion. The analysts' expectations represent a one cent per share increase over 2003's holiday performance, while the company's projections represent a smaller profit margin (Lacy, 2004).

In June 2004, Electronic Arts announced that it would cease accepting advertising for online casinos on its Web site. Online gaming is considered illegal by American authorities, and Electronic Arts had a relationship with Forward Slash, an online gambling company based in South Africa. Online casinos are typically based outside the United States in countries such as South Africa or Costa Rica where their activities are considered legal. The move by Electronic Arts was expected to cost the company less than $5 million (Richtel, 2004).

The decision was based on increased scrutiny of relationships between American companies and offshore Internet gaming sites by the Justice Department. Although Electronic Arts was not being investigated at the time it made the decision, and although there is some question as to whether the companies that continue to promote online gaming are themselves guilty of any criminal activity, the attention by the Justice Department has succeeded in reducing the number of American-based companies that indulge in this type of behavior. Google and Yahoo are examples of two other companies besides Electronic Arts...

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Leadership Programs of Electronic Arts. (1969, December 31). In LotsofEssays.com. Retrieved 10:01, March 28, 2024, from https://www.lotsofessays.com/viewpaper/1693419.html