[2] The company originated as a mod team for Half-Life 2, based at the University of Portsmouth in 2007, and is named after John Searle's Chinese room thought experiment.

This stand-alone version of the mod received several IGF nominations, such as the Seamus McNally Grand Prize, Excellence in Visual Arts and Audio, and the Nuovo Award.

[10] In late July 2017, The Chinese Room's directors, Dan Pinchbeck and Jessica Curry, laid off the entire staff—at that point eight people—and ditched their Brighton office for home.

They cited the lack of ability to pay their staff during the interim between projects as the reason for the closure, and expressed their intentions that the studio itself was still running without the development team, with Pinchbeck and Curry working on prototyping and acquiring funds on their own time.

Co-founder Pinchbeck took the role of creative director for The Chinese Room, while Curry continued as an independent composer for the studio.

[18] At their PAX West panel, Paradox Interactive revealed that the Chinese Room had taken over development duties on Vampire: The Masquerade – Bloodlines 2 from Hardsuit Labs,[19] who were fired from the project in 2021.