While attending school in Vancouver, Richard Darling and his elder brother David Darling learned programming with punch cards and, with school friend Michael Heibert — whose family owned a VIC-20 computer — founded Darbert Computers, creating clones of popular games such as Galaxian and Defender. Returning to England, the brothers founded Galactic Software and began developing budget-priced games for Mastertronic, a British software publisher, including Space Walk, BMX Racers, Jungle Story, Orbitron, Sub Hunt, and Pigs in Space. By the time they were 16 and 17, they had earned £200,000. In 1985, they owned a 50% stake in Mastertronic, which they sold in March 1986. By October 1986, with support from their father James, the brothers founded Codemasters — initially called Code Masters — operating from the Beaumont Business Centre in Banbury, managed at the front desk by their elder sister Abigail.
Codemasters' first game was BMX Simulator, a successor to BMX Racers. The company aimed to produce budget-priced games with the quality of full-priced titles to build a broad customer base. Early titles were developed on a freelance basis and included G-Man and Danger Zone by Mike Clark, Terra Cognita by Stephen Curtis, Super Robin Hood and Ghost Hunters by the Oliver Twins, Super Stuntman by Peter Williamson, Lazer Force by Gavin Raeburn, and ATV Simulator by Timothy R. Miller.
As the 8-bit computer market diminished, Codemasters moved to the 16-bit console market. They achieved success with the Micro Machines series and Pete Sampras Tennis on the Sega Mega Drive, both featuring the J-Cart technology that allowed two extra controllers to be attached to the game cartridge without requiring an additional adaptor. Codemasters is notable for making the large majority of games published by Camerica, which bypassed Nintendo's lock-out chip and produced unlicensed NES games known for their shiny gold and silver cartridges; many Codemasters titles also appeared on Camerica's Aladdin Deck Enhancer.
In 1990, Codemasters developed the Game Genie, a cheat cartridge for the NES released in the US by Galoob and in Canada and the UK by Camerica. In the court case Galoob v. Nintendo, the courts concluded the Game Genie did not violate Nintendo's copyright, qualifying as fair use. In 1999, Codemasters announced a new development studio in Oakhurst, using offices formerly occupied by Sierra On-Line and hiring staff from Yosemite Entertainment.
Between 1998 and 2003, Codemasters partnered with Jester Interactive Limited to publish music creation software, including MUSICtm, Music 2000, MTV Music Generator, and MTV Music Generator 2; the partnership dissolved in 2003. Codemasters released its final music product, MTV Music Generator 3, in 2004.
Codemasters continued releasing titles for later generation systems, including the Colin McRae Rally and Dirt series, the F1 series, the Grid series, the TOCA series, and the Project CARS series, among others.
In May 2008, Codemasters won the rights to the Formula One licence after Sony's deal ran out, ending the Psygnosis and Sony Formula One series. The first resulting game, F1 2009, was released on Wii and PlayStation Portable in November 2009; F1 2010 followed on PC, PlayStation 3, and Xbox 360 in 2010.
On 25 April 2008, Codemasters bought Sega Racing Studio following Sega's closure of the studio. It had been headed by Guy Wilday, previously involved in the Colin McRae Rally games. The same year, Codemasters announced a partnership with Majesco Entertainment focusing on DS and Wii titles.
In the 2008 Queen's Birthday Honours, Richard and David Darling were appointed Commanders of the Order of the British Empire (CBE) for services to the video game industry.
In 2005, Rod Cousens, formerly of Acclaim, was appointed managing director. In December 2006, Warner Bros. Interactive Entertainment entered a distribution agreement with Codemasters for North American distribution. In June 2006, Codemasters was purchased by equity group Balderton Capital. That same month it released Colin McRae: Dirt, and published Overlord and Clive Barker's Jericho. Following the death of Colin McRae on 15 September 2007, Codemasters released a public statement expressing sorrow and support for his family.
On 5 April 2010, Reliance Big Entertainment, an Indian company, acquired a 50% stake in Codemasters. In June 2011, the Codemasters website was breached; on 10 June 2011, the company notified users of the attack via email, taking its websites down and redirecting users to its Facebook page. On 9 June 2013, Reliance Entertainment increased its stake from 50% to 60.41%, becoming the majority owner.
In mid-2012, Codemasters' racing games began to be branded under the "Codemasters Racing" label; Dirt: Showdown and F1 2012 were the first titles to receive the label. The label was discontinued in 2016, with Dirt Rally and F1 2016 returning to the regular Codemasters logo.
In April 2015, CEO Rod Cousens left to join Jagex; COO Frank Sagnier became temporary CEO. In April 2016, Codemasters hired most of the staff of racing game developer Evolution Studios after Sony closed the company.
The first Codemasters title for eighth-generation consoles was F1 2015, launched in July 2015. In October 2015 it released Overlord: Fellowship of Evil.
Codemasters held an initial public offering on the London Stock Exchange's Alternative Investment Market on 1 June 2018; shares were valued at 260 pence, raising a total of £185 million. Reliance Entertainment held a 29.5% stake following the IPO. Through placings in June and November 2019, Reliance exited its nine-year relationship with Codemasters.
In November 2019, Codemasters acquired Slightly Mad Studios, developers of the Project CARS titles, for approximately US$30 million, bringing total staff at Codemasters to about 700.
In June 2020, Codemasters acquired the exclusive licence to the World Rally Championship series, beginning as a five-year deal in 2023.
In November 2020, Codemasters announced it had been approached by Take-Two Interactive with a buyout offer valued at £739.2 million. Electronic Arts subsequently made a competing offer in December 2020, offering to buy all outstanding shares at £6.04, for approximately US$1.2 billion — about 14% higher than Take-Two's offer. Codemasters' board agreed to the EA deal; Take-Two formally withdrew in January 2021. The acquisition was completed on 18 February 2021, with all shares transferred to Codex Games Limited, a subsidiary of EA. CEO Frank Sagnier and CFO Rashid Varachia departed at the end of July 2021.
In May 2022, EA merged Codemasters subsidiary Codemasters Cheshire into Criterion Games, an existing EA subsidiary, to support work on the Need for Speed series; a new title, Need for Speed Unbound, was released on 2 December 2022.
In December 2023, an unknown number of Codemasters employees were laid off by EA. In May 2025, Codemasters ceased development on its WRC titles, with further layoffs and some employees moved to other EA Sports properties.
The Ego engine is a modified version of the Neon game engine, first used in Colin McRae: Dirt. It was developed by Codemasters and Sony Computer Entertainment using Sony's PhyreEngine cross-platform graphics engine, designed to render detailed damage and physics as well as large-scale environments.
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