Ian J. Bowden, Dave Box, Gordon Hall, and Jason McGann founded the company as Möbius Entertainment in December 1997 after working together at the studio Hookstone.

Rockstar Leeds was founded as Möbius Entertainment by Ian J. Bowden, Dave Box, Gordon Hall, and Jason McGann.

[5] Under Twilight, McGann conceived the game Alfred Chicken, originally based on Rainbow Islands and later influenced by Super Mario World.

A demo was presented to Ocean Software, which had released some of Twilight's previous games, and the company was interested in publishing Alfred Chicken if its titular protagonist was replaced by Woodstock from the Peanuts franchise.

The studio instead worked with agent John Cook on a deal with publisher Mindscape that allowed Twilight to retain the game's intellectual property.

[3] McGann and Tattersall, the artist for Alfred Chicken, left Twilight shortly after finishing the game for the Super Nintendo Entertainment System in 1994 and founded Hookstone.

[6][7] Hall described himself as "a programmer with an eye on the business side" and quickly noticed that the company "didn't have long left to live".

[2] The company moved into the converted building of the former St Paul's Parish Church (built in 1853) in the Stanningley district of Pudsey, a town close to Leeds.

At the time, that company was looking for family-friendly games for its PlayStation console, which was nearing the end of its lifecycle, and greenlit an Alfred Chicken remake for the platform.

[18] Other early Game Boy Advance projects by Möbius include Bionicle,[19] Drome Racers,[20] and A Sound of Thunder, a tie-in for the film of the same name.

[23] Around 2002, Möbius created an internal team to develop a game engine for a prospective high-performance handheld console, such as what would be a "GameCube in your hand" by Nintendo.

[41] Rockstar Leeds won "Best Handheld Games Studio" and was a finalist for "Best In-House Team" at the 2009 Develop Industry Excellence Awards.

[8] At this time, Hall stated the studio's intent to create original intellectual properties for next-generation platforms and step away from handheld development.

[49][50] The senior designer Simon Iwaniszak resigned from Rockstar Leeds to briefly join Double Eleven before opening Red Kite Games in early 2012.

[51] Hall took a sabbatical in 2011 to research "player psychology and microtransactions strategy" and joined Activision's mobile-focused The Blast Furnace studio as chief creative officer in August 2012.

[54][55] In July 2014, Rockstar Games contracted the property consultancy WSB to find 15,000 square feet (1,400 m2) of office space in Leeds.