Big Fish Games has acquired game development studio Grubby Games as it makes its first big spend from the whopping $83.3 million war chest it raised last year September to fuel expansion. Terms of the acquisition were not disclosed, but the Big Fish Games blog notes that Grubby Games co-founder Ryan Clark will run the company’s Vancouver office.

With lots of competition in the casual game space, some consolidation is predictable. Among Grubby’s hit games are Professor Fizzwizzle, FizzBall, IncrediBots, and My Tribe. Grubby Games was founded in October 2004. Three of Grubby’s employees are joining Seattle-based Big Fish, which has raised more than $90 million to date from investors including Balderton Capital, General Catalyst Partners and Salmon River Capital.

Big Fish was founded by former Real Networks game executive Paul Thelen in 2002. It has more than 300 people, mostly in the Seattle area. More than 500 independent developers work with the company now, providing games that Big Fish distributes on its web site. Big Fish indicated it wanted to expand into Vancouver, so the acquisition fits with that plan.

Prior to September, the company raised $8.7 million in angel funds — in two different tranches — in 2005. Growth has been strong thanks to the extended reach of broadband, a growing interest in casual games among all demographic groups, overseas expansion, and strong social networking.

Big Fish is the big kahuna in downloadable games that users can play free for an hour before purchasing. The company has tried to be a MySpace of games by creating reward programs for those who spread games virally by sharing them with friends. After a year, players get rewards. And they can chat with each other in forums built into the site. The company has partnerships with Activision Blizzard, which publishes some of the company’s biggest hits in retail stores, and Nintendo, which published “Mystery Case Files: MillionHeir” for the Nintendo DS. Mystery Case Files was a big hit on Big Fish.

Rivals include casual game companies of all sorts, including Real Networks, Electronic Arts’ division, and Disney’s Club Penguin.

In September, Big Fish Games chief executive Jeremy Lewis said the company continues to experiment with new business models, and he noted that more than half of the company’s staff is dedicated to research and development.