THQ Popping on 'UFC 2009' Reviews

THQ (THQI) was surging 11% Tuesday to $5.87 on heavy volume in reaction to a slate of positive reviews of its new title UFC 2009: Undisputed, which is based upon the Ultimate Fighting Championship mixed martial arts organization.

UFC 2009 has been widely anticipated as the first high-quality MMA video game, with analysts expecting the game to sell 2 million units or more this fiscal year.

However, those expectations may actually be on the conservative side based upon recent observations in the MMA and gaming worlds. Despite a tough economy, the Ultimate Fighting Championship is absolutely thriving. Pay-per-view buys for the company’s recent UFC 91, 92, and 94 events were all above 1 million, and the UFC’s schedule for the next few months is packed with hot fights, including July’s landmark UFC 100.

And remember – most people don’t watch UFC PPV at home alone, and tons of folks pack themselves into bars each month to watch the fights. So for the hottest UFC events, there could be upwards of 10 million people watching, a great deal of whom fit into the key video-game demographic of 18-34 year-old males. That’s one heck of a powerful captive audience that guarantees a hot start for UFC 2009.

But what could turn the game into a mainstream video-game hit is positive reviews, which can have a dramatic effect on sales figures. Just read this excerpt from a Wall Street Journal article published a couple years back:

About 18 months ago, Activision (ATVI) also conducted a study of 789 games made for Sony Corp.'s (SNE) PlayStation 2 console and found a strong correlation between some high game scores and strong sales. Activision Chief Executive Robert Kotick says the link was especially notable for games that score above 80% on Game Rankings, which grades games on a 1-to-100 percentage basis, with 100% being a perfect score. For every five percentage points above 80%, Activision found sales of a game roughly doubled. Activision believes game scores, among other factors, can actually influence sales, not just reflect their quality.

Right now, UFC 2009 is sitting at 88% at Metacritic, which bodes well for an initial pop from non-UFC fans. However, that score will come down in short order. There is currently a small number of reviews (8 for the 360 version, 7 for the PS3), and the averages have been skewed by the ridiculous 100/100 scores given by GamePro and GameShark. With so few ratings for the game, those individual numbers have a huge effect on the overall MetaCritic rating.

So while the UFC and THQ are likely gloating right now about these positive reviews, the Metacritic/GameRankings (which are largely interchangeable) averages will come down, which could very much affect how sales trend over the next few months. If the average score lands in the 80-85% range, the game could sell 3 million+ units or even more.

P.S. If you’re rushing out to pick up this game today, I recommend avoiding GameStop (GME) and heading over to Best Buy (BBY), which is offering a free UFC DVD and $10 gift card with purchase.

Disclosure: I own shares of THQ