Ngmoco (ngmoco), a popular iPhone gaming app developer, announced it's acquired Stumptown Game Machine, another game developer.  The terms of the deal were not disclosed.

Stumptown is most well-known for its iPhone/iPod touch game, Touch Pets Dogs.  The game was actually developed in collaboration with ngmoco back in November of 2009.  In short, the game lets players raise pets, then adds some social elements like letting players from around the world go on play dates with one another.  The free app has seen around five million downloads.

It's all about the artificial intelligence (AI) and ngmoco makes clear to note this in its announcement.  Andrew Stern and Richard Evans, who have worked on titles like Petz and The Sims 3, which are very AI oriented games, are joining ngmoco's team.  

Neil Young, CEO of ngmoco said, "With a proven track record of games that are equal parts charming, fun and accessible, we’re proud to have such terrific AI designers and innovative thinkers expand our growing line-up of games.”

San Francisco-based ngmoco said Stumptown Game Machine would retain its own name, brand and base of operations in Portland, but now be a part of the ngmoco family.  

The two companies said they are working on a soon-to-be announced follow up to Touch Pets Dogs.  

We can expect to continue to see acquisitions in the social/mobile gaming space.  Ngmoco recently raised a whopping $25 million and immediately acquired a competitor, Freeverse.  Other gaming companies like Zynga and Playdom have been making acquisitions of smaller gaming companies with their cash as well.  

Personally, I'm a huge fan of ngmoco's titles.  They have excellent controls and really make use of the iPhone's user interaction interface.  My personal favorite is Dropship which you can download for free in the App store.  Check it out.