Founded in January 2005 by Elie Akilian, the company operates a development studio in Round Rock, Texas, which hosts the majority of its staff.

[1] Inspired by his teenage son, who was a fan of video games, Akilian established KingsIsle in Plano, Texas,[2] and started hiring former employees of id Software and Ubisoft to work on what would become Wizard101.

[1][3] J. Todd Coleman, who had sold his company, Wolfpack Studios, to Ubisoft in 2004, joined KingsIsle in December 2007 after being introduced to Akilian through mutual contacts.

[4] Coleman became the company's third employee and the first to be located in Austin, Texas, where he was joined by former Wolfpack Studios co-founder Josef Hall shortly after.

[5] At this point, the company had 100 employees in Plano and Austin, and was run by Akilian as chairman and chief executive officer, and David Nichols, formerly of Midway Games, as president.

[6][7] For the company's first project, Wizard101, Coleman headed the development, while Tom Hall, the co-founder of id Software and Ion Storm, served as creative director.

[6][8] Later that year, KingsIsle released Wizard101 as a card-battling massively multiplayer online role-playing game aimed towards children and teenagers, in which players take on the role of student witches and wizards in a fantasy world.