Playfish has 60 million registered users
The US video game publisher Electronic Arts has paid $275m (£170m) in cash, plus $25m in share options, for two-year old gaming company Playfish.
The deal could cost a further $100m if Playfish hits certain financial targets by December 2011.
Playfish is different from many rivals as it makes free games for social networking sites - such as Facebook and MySpace - and mobile phones.
Players typically will then start paying for extras as they get hooked.
Playfish has 60 million registered users for its virtual games, such as Pet Society and Restaurant City.
"Joining EA is is the ideal opportunity for us to push forward our goals to lead in the social entertainment evolution on a faster and much larger scale," said Kristian Segerstrale, Playfish's co-founder and chief executive.
Mr Segerstrale said he didn't start Playfish to make money, but more out of an interest in changing gaming itself.
Conventional electronic games not only charge from the off, but generally involve either one player, or a group of players online at the same time.
Social networking games use existing contacts, something that Playfish says mimics the way families traditionally played games.
One of Electronic Arts' best-known products is the Sims role playing game.
Although the latest version was a huge success when it launched in the summer, sales have slowed.