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Comments that don't warrant a thread - Part 3


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And here it is: EA Sports bought the UFC video game license from THQ. Makes you wonder if THQ will try to unload WWE as well and if WWE '13 is in any danger, which would be really bad for WWE and the wrestlers, especially the undercard guys who make most of their money off the games.

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Was that ever the narrative? She met him at an independent show she went to as a fan and they didn't go to the same school.

I know that.

 

It was never that Chris lead her completely astray or anything. But it always seemed to me at least Tammy more than semi-reluctantly used her college tuition money to subsidise Chris and his Wrestling career when really it seems now she was a more than a willing companion in that journey.

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How the fuck are video games big news? LOL! WHO CARES? What a joke...

 

That might have been more disappointing than "big changes" in TNA that get announced every month.

 

Meltz did a decent job of garnering some attention for it though. Meltzer is the new Dixie Carter.

 

That wasn't even as big of news as RAW saying it's going three hours or TNA going live.

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Yeah the video game news trended on Twitter for a couple of minutes as everyone was retweeting the news and then it went away very quickly. If this was 5 years ago when UFC had upward momentum this would be bigger than what it is but it's not.

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That THQ is in deep shit has been known for a long time. The WWE title isn't in danger unless the company goes under, in which case someone will buy that title because it's relatively valuable.

 

The longer term negative is that companies like the UFC and WWE want to have a competitor to the EA and Activision Empires to drive/keep up licensing rates. With THQ likely to go in the tank in the not so distant future, that's doesn't help negotiating.

 

John

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My friend Barry wrote a funny tweet:

 

Apparently EA UFC will have simulated breaking news audios from @WONF4W for every in game drug test failure. #satire

:lol:

 

Edit and in reply:

 

 

Meanwhile, WWE's game will also have UFC drug test failure updates. #evenmorecuttingsatire

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The deal with THQ was through 2018. It's not clear if the transition to EA covers the same period, but they are tossing around multi-year.

 

EA in favor of THQ, and avoiding the title from going under if/when THQ gets delisted / goes BK... that's not a bad deal in general for UFC. But it really isn't that big of a deal.

 

The bigger deal is that the games are sinking like a rock since the first one:

 

1.95m UFC 2009 Undisputed

1.21m UFC Undisputed 2010

0.52m UFC Undisputed 3

 

U3 will go up from there, but... not great.

 

EA may do better with it. But it's not a monster revenue stream. We could look up in the WWE's 10-K to see how much they bring in from video game licensing revenue.

 

John

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A lot of the mid to lower card guys get a fairly nice cut of the video game royalties (compared to their base salary) so if THQ goes tits up and leaves the WWE games up in the air, it would would suck for most of the roster. I know whenever they announce the roster every year there's always people pissed off at missing the cut since it's a nice chunk of change.

 

So while Dave may have overplayed this as MAJOR NOOZ, it can have a ripple effect to WWE.

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EA may do better with it. But it's not a monster revenue stream. We could look up in the WWE's 10-K to see how much they bring in from video game licensing revenue.

Looking at the WWE's 10-K:

 

Licensing Revenue:

2011: $54.4M

2010: $51.7M

2009: $44.7M

 

Profit Contribution:

2011: $40.3M

2010: $38.4M

2009: $33.7M

 

2009 note:

"Licensing revenues include $8.2 million in the toy category... Videogame revenue was $19.6 million"

 

2010 note:

"Our toy category licensing revenues increased by $9.3 million... Our video game category licensing revenues decreased by $3.0 million"

 

2011 note:

"Our toy category licensing revenues increased by $1.1 million... Our video game category licensing revenues increased by $8.0 million"

 

If I'm doing my math correctly:

 

$18.6M = Toy ($8.2M + $9.3M + $1.1M)

$24.6M = Videogame ($19.6M - $3.0M + $8.0M)

 

The profit magin is high to the company, given it's licensing and their primary "cost" would likely be what they kick back to the wrestlers / performers.

 

UFC doesn't have as many properties as the WWE, nor probably sell in the volume of the WWE (in total), nor the long standing brand and selling/negotiating ability of the WWE. So it's not likely that UFC currently (as in this year) is close to the WWE in terms of revenue from the THQ deal. Say perhaps... $10M+ ? Though a good chunk of it would be profit, so 70%+

 

Not a massive revenue stream, but decent money in the pocket of Zuffa.

 

This isn't Major Major Big. Probably isn't going to massively move the revenue dial for the company.

 

John

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A lot of the mid to lower card guys get a fairly nice cut of the video game royalties (compared to their base salary) so if THQ goes tits up and leaves the WWE games up in the air, it would would suck for most of the roster. I know whenever they announce the roster every year there's always people pissed off at missing the cut since it's a nice chunk of change.

 

So while Dave may have overplayed this as MAJOR NOOZ, it can have a ripple effect to WWE.

It won't leave the WWE up in the air. To generate $24.6M in licensing fees to the WWE (which are likely based on a per unit royalty rate), those WWE games have to move a lot more than that in revenue for THQ. Someone like EA or Activision or another firm would take that revenue.

 

Now it's possible that the WWE's rates are so high that no one would take it until THQ slides into BK, rendering the WWE's current deal worthless and force them to negotiate a new deal with someone. Don't know if that's the case, or if the deal is profitable for THQ.

 

The reports after Undisputed 2010 game out was that it was a burden on the books of THQ, and the newest one sold even less. So this may be THQ trying to do a double here: offload a money losing title from their books (i.e. before they start working on the next title) while getting a nominal amount from EA at a time they need cash. In turn, EA may look at the sales and believe they can increase them... and/or cut a new deal/rate with UFC as part of the license move.

 

Which means they may be holding onto the WWE license because it's of value to the company... which in turn means that it would be value to someone if the company is sliding down the rabbit hole.

 

I wouldn't worry too much about the WWE video games.

 

John

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