Michael Comeau's  Instablog

As I've written, THQ's (THQ) got a major hit on its hands with UFC Undisputed: 2009, its first game based upon the Ultimate Fighting Championship mixed-martial arts brand.

We're now getting an even bigger taste of just what this franchise can do.

The UFC held its landmark UFC 100 event Saturday night, which likely sold over a million pay-per-view buys - a huge success in a hard recession. The company also put together a Fan Expo which included a Q&A session with Lorenzo Fertitta, a UFC owner who was also a head honcho at Station Casinos.

Mr. Fertitta had this to say about UFC Undisputed: 2009:

"...when we had the opportunity to go out and build a video game who do you think the first people we called was? EA Sports… We sat in the room with them and I would have cut a worse deal just to be with EA Sports. I wanted them so bad. They looked at them and they told us they didn't think MMA was a sport. This was three years ago. They said the UFC was irrelevant and that we were wasting their time. So we went down the street and did a deal with THQ and they thought MMA was a sport. So we stick with the guys who stick with us. Now the UFC video game has been a massive success with three million copies sold. And guess what EA wants to do? They want to do an MMA game now…"

So essentially, he leaked that the game is now up to three million in unit sales. Analysts expected the game to sell two milion by next March. But THQ and the UFC have exceeded those expectations by 50% in less than two months.

If you follow the mixed-martial arts industry, you likely know that the UFC prizes loyalty above all else when it comes to dealing with fighters and other business partners.

Having been shunned by Electronic Arts (ERTS), there is now little doubt in my mind that THQ will retain its license to make UFC games well beyond 2011 as dictated in the original agreement. Nobody else has the experience THQ does in combat sports like wrestling and mixed-martial arts, and its staff has been very loyal to the UFC.

This lends credence to my belief that EA should acquire THQ to get its hands on the UFC license. EA has a major uphill battle if it wants to succeed with an MMA game simply because it can't tie in a major brand with its franchise. On the other hand, the UFC name would be a perfect fit for EA Sports. Not to mention that it would also be picking up the WWE (WWE) license and some other nice properties like Saint's Row and Company of Heroes.

So if EA wants in on the MMA boom, the only option is to buy THQ.

Disclosure: long THQI stock and calls, short THQI puts