It was established in 1997 by its parent company Nanao (now Eizo) for the purpose of taking over the development department of the original Irem Corporation, that had left the video game industry in 1994 to concentrate itself on the rental and sales of coin-op electronics.

[3] Irem is known internationally for three 1980s arcade games: Moon Patrol (1982; licensed to Williams Electronics in North America), the earliest beat 'em up, Kung-Fu Master (1984), and the scrolling shooter R-Type (1987).

At first, IPM's purpose was to build and install video game machines for small stores in Japan, and its initial vocation was not much different from Tsujimoto's previous venture.

With Breakout and its various clones dominating the video game scene, IPM started to manufacture, sell, and rent arcade hardware cabinets.

However, Tsujimoto was blamed in 1982 for the declining sales of the video game IPM Invader and other lackluster titles, and was replaced by Nanao's president.

Three arcade games released by Irem in the 1980s became the company's most successful titles: Moon Patrol (1982; licensed to Williams Electronics in North America), the earliest beat 'em up, Kung-Fu Master (1984), and the scrolling shooter R-Type (1987).

[8] While Irem's arcade video games in the 1980s were typically developed in-house, its published titles on the Famicom home console were often handled by Tamtex, a Tokyo-based sister company from the Nanao Group.

Then, a group of employees from Irem's video game division, left to form their own company under the name Nazca Corporation, which became best known for developing SNK's Metal Slug franchise.

[2][15] As a result of the 2011 Tōhoku earthquake and tsunami, Irem canceled the majority of its remaining video game projects, including Disaster Report 4 Plus: Summer Memories (its production resumed in 2014 under another publisher) and a sequel to Steambot Chronicles.

Many Irem designers, including producer Kazuma Kujo, gathered to form a new company called Granzella to continue creating video games.