In 1996, John Smedley was put in charge of SISA's development of an online role-playing video game.

In April 2000, Verant hired former Ultima Online developers Raph Koster and Rich Vogel.

SOE acquired Verant in June 2000, and eventually promoted Brad McQuaid to be its Chief Creative Officer.

[6] In October 2001, McQuaid resigned and founded Sigil Games Online, drawing many of the original developers of EverQuest from SOE.

Developed by Sony Online Entertainment, LucasArts released Star Wars Galaxies in 2003, which saw rapid growth, as expected.

Bruce Woodcock estimates that Star Wars Galaxies reached nearly 300,000 subscribers within the year, before trailing off.

LucasArts has released three expansions for Star Wars Galaxies, Jump to Lightspeed in October 2004, Rage of the Wookiees in May 2005, and Trials Of Obi-Wan in November 2005.

In January 2005, Sony Online Entertainment announced the creation of Station Publishing, a new label for distributing titles made by external developers.

However, Sigil retained full development rights, and SOE's role was only that of marketing, distribution, technical support, and hosting the game servers.

In August 2006, SOE announced the acquisition of developer Worlds Apart Productions, renaming the studio SOE-Denver.

In January 2007, SOE announced that it has licensed rights from Midway Home Entertainment to develop and release six classic Midway games for PlayStation 3 download, including Mortal Kombat II, Gauntlet II, Joust, Rampage World Tour, Rampart, and Championship Sprint.

SOE is headquartered in San Diego, California, with additional game development studios located in Austin, Texas, Denver, Colorado and Seattle, Washington.

These included Acceleration of Suguri X Edition, Akimi Village, Plants vs. Zombies, Rochard, Sideway and Slam Bolt Scrappers.

[13] On March 31, 2011, SOE confirmed that "it will eliminate 205 positions and close its Denver, Seattle, and Tucson studios."

In the course of our investigation into the intrusion into our systems, we have discovered an issue that warrants enough concern for us to take the service down effective immediately.

"[20] Later, SOE disclosed that "personal information from approximately 24.6 million SOE accounts may have been stolen", including names, addresses, telephone numbers, email addresses, gender, date of birth, login ID, and hashed passwords.

[23] On February 11, employees of the company reported they were undergoing layoffs, including several senior developers and project managers.

[29] In April 2018, Viktor Vekselberg, a Russian businessman and owner of portfolio company Renova Group, was sanctioned by the United States Department of the Treasury as part of an investigation on Russian interference in the 2016 United States elections.

[38][39] These layoffs were towards "a realignment of the company into separate franchise teams, which will allow us to highlight their expertise, better showcase the games they work on, and ultimately provide tailored experiences for our players.

[40] In August 2020, it was announced that Daybreak would acquire Cold Iron Studios which was developing a PC and console game set in the Alien universe at the time.

[41] However, the deal never went through and the subsequent purchase of Daybreak by Enad Global 7 did not include Cold Iron Studios.

On December 1, 2020, it was reported that Daybreak Game Company would be acquired by Enad Global 7 for $300 million.

[43] In December 2021, it was reported that Daybreak Game Company would be taking over development of Magic: The Gathering Online in 2022.