Epic Games was initially founded under the name of Potomac Computer Systems in 1991 by Tim Sweeney in Rockville, Maryland. Potomac Computer Systems released its flagship product, ZZT, the same year. During the latter portion of ZZT's life span, the company became known as Epic MegaGames. Gradually, the Epic brand grew with the advent of its shareware games, including Epic Pinball, Jill of the Jungle, Jazz Jackrabbit and One Must Fall: 2097. During this time, Epic also published and sold games developed by other developers such as those by Safari Software and also XLand's Robbo, Heartlight, and Electro Man; and Renaissance's Zone 66. In 1997 Safari Software was acquired in whole by Epic and some of their titles as well as other pre-1998 games are sold under the Epic Classics brand.
In 1998, Epic MegaGames released Unreal, a 3D first-person shooter, which expanded into a series of Unreal games. The company also began to license the core technology, or Unreal engine, used for the series to other game developers. In 1999, the company changed its name to Epic Games and moved its offices, including its Rockville headquarters, to Cary. In 2006, Epic released the Xbox 360 and PC bestseller Gears of War and has completed working on Unreal Tournament 3. A port of Gears of War for Mac OS X is also in the works. On August 20th, 2007, they acquired a majority shareholding in Polish developer People Can Fly.
Key developers at Epic Games include the aforementioned lead programmer Tim Sweeney, game designer Cliff Bleszinski, Erik de Neve and Steve Polge. In 2003, Jerry O'Flaherty was named Studio Art Director.
On 17 March 2008, Epic Games partnered with Valve Corporation and released the entire Unreal series (excluding UT2003) over Steam.
On 19 April, 2008 Epic Games' Mike Capps stated that he believes the popularity of the Wii video game console is like a "virus" in that one person thinks it looks cool and buys it, but only plays it for two months; but in that two months friends will see the Wii, think it looks cool, and buy one for themselves, propagating the cycle. When asked whether there would ever be a time when Epic would be forced to give in and create a game for the Wii, Mike Capps said, “no, we go forward, not back. It makes more sense for us to invest in the next-generation tech.”
On 20 May, 2008, Epic Games acquired Chair Entertainment.
On 7 November, 2008, Epic Games released Gears of War 2, sequel to the best selling shooter on the Xbox 360.
Due to the success of Gears of War, the studio were also awarded with IGN's "Best Developer for Xbox 360", Official Xbox Magazine's "Best Developer of the Year" and "Best Studio of the Year", and Spike TV's "Best Studio".
Epic is the proprietor of three successful game engines in the video game industry. Each Unreal Engine has a complete feature set of graphical rendering, sound processing, and physics that can be widely adapted to fit the specific needs of a game developer that does not want to code its own engine from scratch. The three engines Epic has created are the Unreal Engine, Unreal Engine 2 (including its 2.5 & 2.X releases) and Unreal Engine 3, Epic's latest release. Unreal Engine 3 has become by far the most commercially used engine of the three. It has been used in games such as BioShock, Mass Effect, Tom Clancy's Rainbow Six: Vegas, Turok, Unreal Tournament 3, Medal of Honor: Airborne, Army of Two, Gears of War and Gears of War 2.