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THQ Outlines Financial Fallout of Ending UFC Deal

Company expects to spend $1.1 million on severance packages.

With UFC locked up, EA has exclusivity over yet another sport.

When UFC president Dana White stepped on stage at Electronic ArtsE3 press conference, an email from THQ appeared in my inbox announcing THQ had transfered the license to EA.

In an SEC filing this morning, THQ disclosed another UFC game was in development at the company, and by moving the license to EA, it would result in the closure of THQ San Diego.

In actuality, we learned about THQ San Diego’s closure during E3--it was completely and tragically lost in the shuffle.

The publisher expects to spend $1.1 million on severance packages, $1.3 million on charges associated to the facilities housing the developer and another $0.5 million “related to long-lived assets.”

THQ did not make it clear why it decided to transfer the license, but it’s pretty clear: UFC Undisputed 3 was a disappointing seller. In order to save its business, THQ is focused on making money, and UFC Undisputed 3 sold less than last year’s game, UFC Undisputed 2010. THQ did not disclose sales numbers for UFC Undisputed 3.

The relationship between the UFC and EA was not always rosy. When EA decided to get into the genre with its own MMA game, there were rumors White would ban athletes who signed to appear in EA’s game. That never happened, but White wasn’t at a loss for words when asked what he thought about the situation.

“I went to EA Sports,” he said to Yahoo! Sports back in 2009. “Know what EA Sports said? ‘It’s not a sport. This isn’t a sport. We would never get involved in something like this.’ We come out with a video game and now they want to come out with a video game? (Expletive) you.”

Patrick Klepek on Google+
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Posted by patrickklepek
With UFC locked up, EA has exclusivity over yet another sport.

When UFC president Dana White stepped on stage at Electronic ArtsE3 press conference, an email from THQ appeared in my inbox announcing THQ had transfered the license to EA.

In an SEC filing this morning, THQ disclosed another UFC game was in development at the company, and by moving the license to EA, it would result in the closure of THQ San Diego.

In actuality, we learned about THQ San Diego’s closure during E3--it was completely and tragically lost in the shuffle.

The publisher expects to spend $1.1 million on severance packages, $1.3 million on charges associated to the facilities housing the developer and another $0.5 million “related to long-lived assets.”

THQ did not make it clear why it decided to transfer the license, but it’s pretty clear: UFC Undisputed 3 was a disappointing seller. In order to save its business, THQ is focused on making money, and UFC Undisputed 3 sold less than last year’s game, UFC Undisputed 2010. THQ did not disclose sales numbers for UFC Undisputed 3.

The relationship between the UFC and EA was not always rosy. When EA decided to get into the genre with its own MMA game, there were rumors White would ban athletes who signed to appear in EA’s game. That never happened, but White wasn’t at a loss for words when asked what he thought about the situation.

“I went to EA Sports,” he said to Yahoo! Sports back in 2009. “Know what EA Sports said? ‘It’s not a sport. This isn’t a sport. We would never get involved in something like this.’ We come out with a video game and now they want to come out with a video game? (Expletive) you.”

Staff
Posted by Supes

cool

Posted by jakob187

UFC Undisputed 3 didn't sell? That's...actually a shock. That game is pretty fucking greatly made. The improvements to it made it far more accessible than the previous two entries, and it felt like they were making some headway into turning that license from merely okay to something stellar.

Now that it's going to EA...and based on what EA MMA turned out to be, I'm pretty sure I won't be bothering with the franchise anymore. Too damn bad.

It's nice to see THQ moving away from licensed stuff and instead getting into original IPs. I just hope they don't drop the 40k license anytime soon.

Posted by BoneChompski

Dana White is tactful.

Posted by Rirse

Judging how the head of THQ was bitter that Saints Row the Third only sold four million units and not (Red Dead Redemption numbers), he probably was made the last game sold less and just cut the deal. THQ will probably be dead by the end of the year if this keeps up.

Posted by Animasta

you know, it's bad that you have to say this, but at least they got severance packages, unlike the peeps at 38.

Posted by Vortextk

It was just another franchise pushed to a yearly one right? Dumb mistake as maybe if they spaced it out it could have had audience retention. Football this is not. Here's hoping for...something? I really want darksiders II and more installments of that franchise as well as more saints row.

Posted by Hurricrane

I thought UFC 3 sold stupid good after how well the first one did. That's really a bummer because I greatly enjoyed all of those games and from what I tried of the EA one it was vastly inferior.

There's no way this doesn't come back to bit THQ in the ass, they should have kept that as close as they possibly could.

Stupid UDraw ruining one of my favorite publishers :(

Posted by Nevi

I remember Dana White's comments in 2009, heheh.

I find this kinda weird, if UFC 3 did poor, and EA MMA was dead on arrival at retail, I wonder what EA's expectations are? Maybe they are going to have a big marketing push, but I won't be picking it up. Since Genki Sudo retired, in my mind MMA is now and forever associated with the last scene of Bruno and a bro fanbase that screams anguished denials about the homoeroticism of their favoured sport :)

Edited by OriginalGman
Posted by NegativeCero

Maybe yearly UFC games were not the way to go with it, but I'm sure EA will do the exact same thing. We'll see if they get better sales.

Posted by Acerock

ironically, I always thought EA MMA was a better gameplay experience than Undisputed. I've been training BJJ for five years now and the grappling system for MMA was a better allegory than Undisputed. Undisputed was more of a button masher to me.

Posted by Xtrminatr

@jakob187 said:

UFC Undisputed 3 didn't sell? That's...actually a shock. That game is pretty fucking greatly made. The improvements to it made it far more accessible than the previous two entries, and it felt like they were making some headway into turning that license from merely okay to something stellar.

Now that it's going to EA...and based on what EA MMA turned out to be, I'm pretty sure I won't be bothering with the franchise anymore. Too damn bad.

It's nice to see THQ moving away from licensed stuff and instead getting into original IPs. I just hope they don't drop the 40k license anytime soon.

The online was significantly worse than previous iterations of the game even with their server alpha. I shelved that game pretty quick after being unable to play a lag free online game, and seeing that they never really fixed the disconnecting players problem from UFC 09.

Posted by familyphotoshoot

    All I want to know is if there's going to be soccer kicks and stomps.

  
Posted by ObsideonDarman

Dana White certainly changed his tune regarding EA and the UFC license. Did he even thank THQ for it's service to the license the past few years?

As for the closures and severance package things. That is certainly a bummer.

Posted by buft

wait... there was a third UFC game?

Posted by zeekthegeek

Man reading that article on Rubin's thoughts on Saints Row..the dude just genuinely does not get why the game was successful. It's never going to cut it as a second-rate GTA.

Posted by AngriGhandi

Soooo, is THQ getting paid by EA, or what? This seems like the kind of move that's usually accompanied by payola... THQ could certainly use some of that. Also;

@OriginalGman: NooooooooOOOOOOOOOOOOOOOOOOOOOOOOOO

Posted by liste3r_fi3nd

I like UFC quite a bit, but I don't think it has the following to have yearly iterations, like say the NFL or NBA.

Posted by Tylea002

There was an undisputed 3? Huh. I guess that explains why it didn't sell.

Posted by Nightriff

I'm stunned it didn't sell well, is there sell figures? I would like to see those

Posted by zeekthegeek
Posted by CountRockula

@buft said:

wait... there was a third UFC game?

I was pretty surprised to hear this too.

Posted by TheHBK

UFC games certainly won't sell in the way WWE games do. It is a matter of demographics and how often these guys fight. It should be a series that has a game every 2 to 3 years like fight night. Let new guys who have risen up be put into the game. Difficulty of a UFC game also, is unlike other sports, where you see and hear the players names every week while a season is going on or like in the WWE, every week all year, so people won't go rush out to buy a guy when they really only get attached to 1 or 2 guys who fight maybe 2 times a year.

Edited by Patman99

@CountRockula said:

@buft said:

wait... there was a third UFC game?

I was pretty surprised to hear this too.

I thought heard about the game when it was released but when looking at both the actual release date and the box art, I clearly missed this one. Dont know if it was the poor marketing or if it was just me not actively seeking it out that caused it to dip below my radar. Im going to guess if there are three of us that missed it, there are probably more.

Posted by jasonefmonk

They should have never tried to go annual with the UFC games. I'm a huge fan of the sport but unless they want to become as inessential as NFL games or COD they should slow it down.

Hopefully EA can make these games worthwhile.

Posted by cmblasko

Yeah, like some other commenters, I had no idea THQ made a third UFC game. Too bad, the first and second ones seemed really well made.

Posted by Romination

I'd actually heard that Undisputed 3 did around 2 million. That's pretty crazy, especially since it wasn't profitable.

Posted by DrDarkStryfe

Rubin has been pretty a pretty visible guy the las two weeks. He has a mountain to climb to try to get that publisher profitable, and THQ has been hinting since their doom and gloom conference call a few months back that they were going to severely shake things up.

The man just needs to be a bit more tactful when speaking with the press. The comments about Saint's Row were blown up out of proportions, partly due to how the interview was worded.

Posted by WVUEers

Undisputed 3 came out at some point in March. The site did a QL on it. Honestly it's a really, really well put together game. Of the small technical issues I had with the previous games, none of them were present in UFC 3. The game was also packed with content. The addition of Pride wasn't just cosmetic either, all of the Pride specific rules were included. Not that they're exactly conflicting markets but maybe the fact that UFC 3 dropped around the time Mass Effect 3 did led to it be lost. Overall though I can't speak higher of the gamer.

Posted by WVUEers

@NegativeCero said:

Maybe yearly UFC games were not the way to go with it, but I'm sure EA will do the exact same thing. We'll see if they get better sales.

Which is why they actually were on a two year cycle. The last UFC game before 3 was UFC 2010

Posted by NegativeCero

@WVUEers said:

@NegativeCero said:

Maybe yearly UFC games were not the way to go with it, but I'm sure EA will do the exact same thing. We'll see if they get better sales.

Which is why they actually were on a two year cycle. The last UFC game before 3 was UFC 2010

Was it? Huh. Guess I've gotten my MMA games meshed together

Posted by MSUSteve

@Patrick Klepek said:

THQ did not make it clear why it decided to transfer the license, but it’s pretty clear:

Huh? Does anyone read this shit before posting it?

Posted by tourgen

EA's MMA game was really pretty great.  It was fun and played well.  The live online stuff they tried out was a lot of fun (when it worked).  I'm looking forward to their UFC-blessed version whenever it comes out.

Posted by vinsanityv22

R.I.P. THQ San Diego. I loved you guys, whether you were making WWE All Stars, Mortal Kombat Shaolin Monks (as Midway San Diego), or X-Men Mutant Academy (as Paradox) - you guys KNOW fighting games. You guys do better transitional animations and more responsive, faster paced combat than any other western developer! Even the core Mortal Kombat team (with their reliance on janky, canned combos) couldn't make a game as good as Shaolin Monks! I would've LOVED to see what UFC game you guys were making. *sniff*

If there's any justice in the world, SOMEONE will pick up all the guys from this team and reform them AGAIN. Just so they can keep making awesome fighting games.

I'm also shocked that UFC Undisputed 3 didn't sell well. I thought this was a big part of THQ's business strategy; I remember they were SUPER HAPPY with the first one's sales. It was a million seller back then for sure; did UFC 3 not manage to pass the million mark? That's shocking.

Posted by DukesT3

Should've given it a year instead of just a number? I dunno. I thought it was weird they put a "3" instead of "2011"

Posted by Bucketdeth

@jakob187 said:

UFC Undisputed 3 didn't sell? That's...actually a shock. That game is pretty fucking greatly made. The improvements to it made it far more accessible than the previous two entries, and it felt like they were making some headway into turning that license from merely okay to something stellar.

Now that it's going to EA...and based on what EA MMA turned out to be, I'm pretty sure I won't be bothering with the franchise anymore. Too damn bad.

It's nice to see THQ moving away from licensed stuff and instead getting into original IPs. I just hope they don't drop the 40k license anytime soon.

EA MMA blew UFC Undisputed out of the water gameplay wise, the fighting system worked better, and the animations were smooth as butter, Undisputed felt like two robots fighting each other.

Posted by I_Stay_Puft

I enjoyed Undisputed 3 and appreciated the tweaks and add-ons they made to that game compared to 2010, such as the addition of the Pride presentation (Go Wanderlei Silva!). I am however pessimistic of the UFC being in EA's hands due to their tendency to making sports game an annual affair and what I think most people have mentioned already, EA sports MMA. UFC is one of those sports where an updated roster doesn't make a huge difference in warranting another buy every year, though I could say the same thing about Madden and for some reason I somehow find myself thinking of buying the latest one. Hopefully, from my perspective they put it in the hands of the developer of the Fight Night series, while admitting to not necessarily being the biggest boxing fan I enjoyed the last two games and liked how they really tried to change it up with each release.

Posted by Phished0ne

So...i wonder if Dana White is actually happy with this license transfer. As mentioned in the article, Dana and EA have had a shaky past. Im interested what kind of changes EA makes to their system, if any. But with some UFC backing and promotion, the concept of live online matches that they attempted with the MMA game could actually be interesting. Also, i will be sad to see head stomps go, that stuff looked brutal in the previous EA MMA title.

Posted by MattyT

@Phished0ne said:

So...i wonder if Dana White is actually happy with this license transfer. As mentioned in the article, Dana and EA have had a shaky past. Im interested what kind of changes EA makes to their system, if any. But with some UFC backing and promotion, the concept of live online matches that they attempted with the MMA game could actually be interesting. Also, i will be sad to see head stomps go, that stuff looked brutal in the previous EA MMA title.

UFC Undisputed 3 had head stomps and soccer kicks, as THQ was able to use the PRIDE FC license, which Zuffa (The UFC's parent company) holds. There's no reason that we won't see a similar PRIDE mode in the first EA made UFC game.

Personally, I'm kind of hyped for this - I've always thought that if EA MMA's gameplay could be combined with the UFC's graphical fidelity and license, it'd result in the ultimate MMA game...now we get an opportunity to see if that's true.

Posted by MattyT

@LooseChange said:

Should've given it a year instead of just a number? I dunno. I thought it was weird they put a "3" instead of "2011"

Because it wasn't released in 2011, it was released on Feb 14, 2012. THQ was switching to a bi-annual cycle after feedback from the community, among other things.

Edited by cthomer5000

@CountRockula said:

@buft said:

wait... there was a third UFC game?

I was pretty surprised to hear this too.

You guys should watch the quick look, if only for Vinny's reactions.

About the game though, i thought de-annualizing it was a good move, but maybe in the end that backfired (since it sold less than Undisputed 2010). They made significant improvements, but ultimately i still found the career mode a grinding chore. I rented it over a weekend and knew when i was returning it that i'd never play it again.

Posted by nickp

It seems EA's big "reveal" at E3 is in fact that they've bought a lossmaking franchise.

Posted by i8246i

Yeeesh, things are looking grim for THQ.

Has anyone from Summer Camp heard about this?

Posted by Hairydutchman

EA's MMA was a great game with a mediocre roster (and not a lot of modes). Sucks for THQ, but I think this will be good for the franchise.

Posted by big_jon

I hope THQ survives.

Posted by Amafi

@Hairydutchman: Press A when the big motor rumbles, never go for major transitions, there you go, you now know all there is to that game. Standup only leagues were fun for like 5 minutes, but fight night is a much better punching simulator.

At least the THQ games had some depth to the ground game unlike EA MMA, even with the janky striking and the sucky "shine" thing in the first two. As an offline game even 2009 beat the pants of EA's first attempt.

Posted by MattyT

I'm sorry, I just have to get this off of my chest.

Patrick, if you wrote the picture caption (which I'm assuming you did), you should be disappointed. EA doesn't own exclusivity over making MMA games. I get it, it's a subtle dig at EA, "sounds cool" and it's holding of major sports licenses. However, it's inaccurate. If EA had "locked up exclusivity of another sport", Bellator: MMA Onslaught, currently in development at 345 Studios (not affiliated with EA), wouldn't be possible.

No game company owns exclusive rights for an entire sport, merely organizations within said sport. No one ever claimed THQ had exclusivity over all of Pro Wrestling due to the WWE license, although the ethos displayed in this article would suggest exactly that. This claim over sport-wide exclusivity is only used in reference to EA, and only provides ammo for detractors to villify EA for holding these so-called "sport-wide exclusivities".

To use "entire sport" interchangeably with [most prominent organization name within said sport] is irresponsible. It may seem like nobody cares about semantics, but as someone who admires and respects your work, Patrick, I do. If you do read this, thanks for your attention.

Posted by StrikeSnyper

the UFC game cost quite a bit too so break-even could be a couple of million units. even if it did "sell well" by most measures with that high of a benchmark, it's going to be tough to make money especially after the UFC takes their cut.

one thing is for sure is that there is probably not going to be really any MMA content for a while because EA has to sort things out like which of their 2 studios will make the game.

Meanwhile I guess there is that $15 Bellator game coming out this summer.... graphics are definitely not as good as the UFC, but it's gotten good feedback from the people who have actually played the game. So maybe I'll check that out.

Posted by devilzrule27

@MattyT said:

I'm sorry, I just have to get this off of my chest.

Patrick, if you wrote the picture caption (which I'm assuming you did), you should be disappointed. EA doesn't own exclusivity over making MMA games. I get it, it's a subtle dig at EA, "sounds cool" and it's holding of major sports licenses. However, it's inaccurate. If EA had "locked up exclusivity of another sport", Bellator: MMA Onslaught, currently in development at 345 Studios (not affiliated with EA), wouldn't be possible.

No game company owns exclusive rights for an entire sport, merely organizations within said sport. No one ever claimed THQ had exclusivity over all of Pro Wrestling due to the WWE license, although the ethos displayed in this article would suggest exactly that. This claim over sport-wide exclusivity is only used in reference to EA, and only provides ammo for detractors to villify EA for holding these so-called "sport-wide exclusivities".

To use "entire sport" interchangeably with [most prominent organization name within said sport] is irresponsible. It may seem like nobody cares about semantics, but as someone who admires and respects your work, Patrick, I do. If you do read this, thanks for your attention.

No one wants to play sports games that don't feature the largest organizations in those sports (mario games excluded). It's why you when you see someone try to make a non-NFL football game it fails miserably. It's why EA stopped making NCAA Baseball. It's why there is no Euroleague basketball game. So yeah when you gain exclusive rights to the largest leagues you essentially gain sport-wide exclusivity.

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