Digital Kids was established in 1996 and has offices in Nagoya and Osaka, with 20 developers specialised in making games for the Nintendo DS.
The firm had already developed a number of DS games for Ubisoft including its Petz line of games including Hamsterz Life (pictured).
"When it comes to Nintendo DS games, Digital Kids has demonstrated a leading knowledge that has resulted in creative animal simulation titles that appeal to Japanese and Western audiences alike, which is quite rare," said Yves Guillemot, chief executive officer of Ubisoft.
"This acquisition attests to Ubisoft's capacity to establish successful partnerships in new territories and reinforces its advance on casual games."
"It is an honor to become part of Ubisoft, one of the world's leading video game publishers," declared Masahito Hasegawa, president of Digital Kids. "I am truly looking forward to using our experience to develop games that will be enjoyed by players all over the globe."