Join Date: Apr 2011
Total Points: 149,596.52
THQ sold UFC to EA because it failed to break even
Though the Ultimate Fighting Franchise games appeared to be one of THQ's few successes, the company says it sold the brand's exclusive license to Electronic Arts because it failed to break even on the latest release.
THQ management told Wedbush analyst Michael Pachter that UFC Undisputed 3, which released for Xbox 360 and PlayStation in February, fell short of hitting its break-even point of 2 million copies sold.
That was in spite of UFC Undisputed 3 becoming the third biggest-selling game in the U.S. in February, and THQ previously noting the title received better-than-expected sales. The series' second most recent release, UFC Undisputed 2010, also underperformed.
After holding the exclusive license to publish UFC games for several years, THQ sold the contract to EA recently -- the transfer resulted in an unspecified number of layoffs at THQ's San Diego studio, which worked on the franchise.
THQ will focus now on breaking even on a title-by-title basis by releasing low-cost triple-A titles, such as Obsidian Entertainment's South Park: The Stick of Truth, which will release next March.
South Park requires a relatively smaller investment than other titles due to its simple animation. That project's break-even point is also 2 million units, though the publisher believes it can sell well above that, THQ told Pachter.
THQ also intends to enter the free-to-play market and make it a significant portion of the company's business in the future, particularly with the next generation of home consoles.