Bloomberg News has a nice piece up that gives some good insight to the numbers game behind the UFC 2009 Undisputed video game that will be hitting stores soon. The article also gives the first intimations of how the title may do at the cash register:
UFC’s male fan base is a main reason Todd Mitchell, a technology analyst with Kaufman Bros. in New York, projects the game will sell more than 2 million copies in nine months.
The UFC license runs through 2011 and may be extended, said Julie MacMedan, a THQ spokeswoman. The company is probably paying UFC about 17 percent of sales or a guaranteed minimum, said Mitchell, who recommends the stock and doesn’t own it.
“UFC 2009 Undisputed” returns THQ to its expertise making fighting games. WWE titles have brought in $1.5 billion in sales over the past decade. The company spent more than $20 million developing the UFC game and will expense “not quite” as much on marketing, Farrell said.
A little quick math pegs the 2 million in sales by the 59.99 list price yields a gross sales figure of $120 million. If we figure the UFC is being paid the license fee off of gross, that would yield the UFC just over $20 million on the deal; if off of wholesale which generally runs 45 to 50% would mean somewhere in the $10 million range.
Another interesting figure is the sunk cost they have in both marketing and production. Between the two they are looking at probably a $35 million outlay. This is a good chunk of money, but is the first step in establishing a a franchise title, which THQ hopes the Undisputed title will be. Subsequent years will have a lowered production cost with the engine merely being tweaked, instead of made from scratch. Marketing cost as well will dip due to the brand awareness established during the initial launch.Link