The company was founded in 1982 at Chiyoda-ku, Tokyo, Japan as Seibu Denshi Inc. (有限会社セイブ電子), but changed to its current name sometime in 1984.

One of their earliest arcade hits was the 1989 rail shooter Dynamite Duke, one of the first to combine close combat with long-range shooting.

A year later, Seibu Kaihatsu became best known for their 1990 vertical-scrolling shoot 'em up arcade game Raiden, which was successful enough to earn several sequels and spin-offs in its series of titles.

During the late '80s, Fabtek bought the rights to internationally distribute Seibu Kaihatsu's arcade titles outside Japan.

During the same year, they established Mahjong Cats (開発部門 キャッツ), right before the dissolution of their relationship with adult video game developers h.m.p.