Specializing in role-playing video games, inXile was founded in 2002 by Interplay co-founder Brian Fargo.

We knew we wanted to stay in video games, so starting a company seemed like a good idea -- he spent 20 years at Interplay and I was there for 13.

"[4] In May 2008, inXile announced the creation of SparkWorkz, an online business division with a focus on user-generated content, using their experience with Line Rider as base for the venture.

[9] During a Kickstarter campaign for the game Wasteland 2, Brian Fargo developed the Kicking it Forward program.

[10] Under this program, inXile Entertainment pledged to use 5% of post-launch net profits to back future Kickstarter projects.

[14] According to Fargo, they were approached in April 2018 by Noah Musler, one of Microsoft's business development executives that had former ties to the studio, who suggested the possibility of acquisition.