The news has been reported by MCV sister magazine Mobile Entertainment as speculation has been mounting about the purchase for the last few days. Now, ME understands that the deal has been done.

It would certainly make sense for the two parties. Eidos is ramping up its mobile activity and is on the acquisition trail, having bought another highly regarded British codeshop Rockpool Games earlier this year. Morpheme is a longstanding partner of Eidos. It developed the mobile version of Hitman and many more.

For Morpheme, the deal brings stability and funds after a period in which it had to rely on its edgy wit to survive. The studio was previously owned by UK gaming giant Argonaut, but reverted to self-ownership after Argonaut imploded in 2004. For the last two years, in the shadow of giants like EA, Gameloft and others, Morpheme has carved a niche with cheeky product like Everything Explodes, Go To Hell and Balloon Headed Boy (pictured). It has also diversified into web-based gaming with the web site offthewrist.com.