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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.
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+