Luckily for THQ, the 18- to 34-year-old male demographic that makes up a great deal of the UFC fan base likes video games. A whopping 2 million units of UFC 2009 Undisputed were shipped within 2 weeks of its May 19 release. And since this sport is still illegal in New York and Massachusetts, there's still plenty of room for growth.

EA is planning a rival title comprised mostly of non-UFC fighters. But according to a Sports Illustrated report, UFC president Dana White put the word out that fighters considering signing with EA had better think twice -- an ominous warning given the company's virtual monopoly on the sport in North America.

The solution? EA should just buy THQ. EA is sitting on $2 billion-plus in cash that isn't generating much in interest; buying THQ makes a heck of a lot more sense than leaving all that money in the bank.

EA would be partnered with the UFC -- the best promotion in the world. It would also own the development house that put together the critically acclaimed and top-selling Undisputed, which would take a lot of the risk out of the equation.

Could EA make a hit MMA game? Yes. Is that guaranteed? No.

THQ has an enterprise value of about $335 million, so EA could offer THQ shareholders a significant premium -- 50% or more -- and the deal would still make sense from a financial standpoint. For $600 million or so, EA would be getting its hands on an incredibly hot sports franchise with room for significant growth in coming years.

In fact, an extremely conservative free-cash-flow model indicates that the UFC license alone is easily worth hundreds of millions of dollars over the long term. Moreover, EA would be getting its hands on other THQ licenses -- including the cash cow WWE, and some valuable intellectual properties such as Company of Heroes. Anything that loses money or competes with an existing EA property could simply be eliminated.

The industry's only going to keep consolidating -- EA buying THQ is the next logical step.