THQ sold its Ultimate Fighting Championship license to EA because the previous game in the franchise, UFC Undisputed 3, failed to break even, reports Wedbush analyst Michael Pachter.

News of the UFC license changing hands broke during EA's EA press conference on Monday, with THQ confirming that money did change hands.

"THQ sought to exit its UFC contract as the most recent iteration fell short of its ≈2 million unit break-even point," wrote Pachter. "Management stated that the cash it received for UFC was incremental to the amount it needs to fund current operations, which was provided by exiting the kids' business."

UFC Undisputed 3 had sold 1.4 million copies as of May 20.

Going forward, Pachter says THQ's "focus is currently on the company's ability to surpass break-even on a title by- title basis by releasing low-cost AAA titles, as well as its opportunity to enter the free-to-play market."