The origins of Studio 397 lay in a working relationship that developed several years before the studio's formal creation. Between 2014 and 2015, Marcel Offermans of Luminis was commissioned by ISI to bring the original rFactor to the Steam platform, a project completed in March 2015. During that period, ISI vice president Gjon Camaj and Offermans began discussing the possibility of Luminis assuming full responsibility for rFactor 2 development.
The arrangement was announced publicly at Simracing Expo in September 2016. Luminis already held relevant credentials: the company had supported Reiza Studios in developing Automobilista, itself built on the rFactor engine. Studio 397 was formally established as the vehicle for this transfer, with Offermans as managing director. The studio's initial roadmap included a redesigned web-based user interface, a DirectX 11-compatible graphics engine, virtual reality support for Oculus Rift and HTC Vive headsets, and a paid-content system to enable licensed vehicle and track additions.
Studio 397 took over a simulator that had launched in 2013 under ISI and was respected within professional motorsport for the accuracy of its physics engine but criticised for its outdated user interface and limited commercial content. The studio moved quickly to address both areas.
In December 2016, with its first build release, Studio 397 made online racing free to all users, eliminating the previous subscription fee. In May 2017, an open beta for the DirectX 11 graphics engine was released, becoming the default renderer later that year while discontinuing DirectX 9 support. Virtual reality capability arrived alongside DX11. The studio also commissioned a laser-scanned version of Sebring International Raceway using Lidar technology — the first laser-scanned track in rFactor 2 — completed in early 2018.
Licensed content expanded substantially. In August 2017, the first paid DLC appeared: the McLaren 650S GT3, followed by a GT3 pack in October and the first Formula E content in November. Historical Formula 1 cars were added across 2018, including the Brabham BT44B, March 761, McLaren M23, MP4/8, and MP4/13. The studio also collaborated with Goodyear to develop tyre data for newer content from 2021 onwards, seeking to address known limitations in the tyre model at minimum pressures.
The user interface, long a point of criticism, was rebuilt using HTML to ease future integration with online services. A public beta of the new UI launched in December 2019, incorporating a new matchmaker for online multiplayer. A Competition System followed in December 2020, providing structured daily racing with ranking functionality.
In 2018, Studio 397 conducted physical tyre testing at the Mechanopôle test track in Alès, France, collaborating with Duqueine Engineering, Nicolas Jamin, and Michelin to refine tyre physics data for LMP and GTE vehicles.
rFactor 2 hosted several significant esports events during the Studio 397 era. The 24 Hours of Le Mans Virtual, organised in collaboration with Motorsport Games, was held in June 2020 and drew participation from professional racing drivers. The event was interrupted when servers failed and required restarting. In 2022, the Le Mans Virtual suffered a security breach, causing further disruption including repeated crashes for drivers including Max Verstappen, who publicly stated he would not participate in future editions. The Formula E Race at Home Challenge used rFactor 2 from April to June 2020.
In March 2021, Motorsport Games entered an agreement with Luminis International to acquire 100 percent of Studio 397 and the rFactor 2 intellectual property for $16 million. The transaction completed in May 2021. Motorsport Games immediately began deploying the rFactor 2 physics engine across its game portfolio, starting with NASCAR 21: Ignition, released in October 2021, which combined the rF2 physics engine with an Unreal Engine graphics renderer. Plans were made to use the same combination for British Touring Car Championship and IndyCar Series titles, both of which were subsequently cancelled in 2023.
Amazon Game Studios had already licensed the rFactor 2 physics engine separately for The Grand Tour Game, released in January 2019.
The rFactor 2 physics engine's reputation within professional motorsport stems from the development lineage connecting it to rFactor Pro, the professional simulation platform used by Formula 1 teams and NASCAR manufacturers. The tyre model was the first in a consumer simulation to implement a thermomechanical, physically-based approach simulating the full tyre carcass, tread, and contact patch with heat transfer, realistic wear, flatspots, and visual deformation. The Real Road system dynamically models rubber accumulation and removal on the track surface across a race weekend, responding to both dry sessions and rain.