As we reported a few weeks ago, EA has been chomping at the bit to enter the social gaming space in a big way.  Today they made it official and announced the acquisition of Playfish for up to $400 million.  As part of the deal, EA will pay Playfish $275 million up front, $25 million in an earn-out agreement, and up to another $100 million based on achieving performance milestones through December 31, 2011.  London-based Playfish has raised $21 million from Accel Partners and Index Ventures, and has estimated revenues of $75 million.

Social gaming has been growing significantly over the last year as platforms like Facebook, MySpace and Twitter have enabled developers to reach large audiences quickly and virally.  EA’s purchase of Playfish marks a the first major deal in the social gaming space with players like Zynga and Playdom watching attentively.

“Social gaming, with its emphasis on friends and community, is seeing tremendous growth and this is the right time to invest to strengthen our participation in this space,” said Barry Cottle, Senior Vice President and General Manager of EA Interactive. “EAi has been successfully leading the charge for EA, and with the addition of proven expertise from Playfish, their broad consumer base and strong game brands, we’re moving ahead aggressively in our plans to lead in the category of cross-platform social entertainment.”

Playfish’s popular titles, Pet Society, Restaurant City, and Country Story – which currently drive more than 1 billion game play sessions every month – now join EA’s mega-titles like Rock Band, Madden and The Sim’s.  We can all expect a rapid wave of popular titles released on social networks over the coming months, much like EA’s recent launch of Spore Island.

The bottom line:  social gaming is here to stay!

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