Development of Entropia Universe (formerly Project Entropia) started in Sweden in 1995 by Jan Welter Timkrans and a group of colleagues. During its initial testing phase in 2002 the offices of MindArk were raided by court officials following a complaint by Microsoft that MindArk was using unlicensed software. MindArk has stated that this may have been an attempt by Microsoft to derail the game's development because of its threat to their game Asheron's Call. The game was launched commercially at the start of 2003.
On 8 May 2007, MindArk announced the results of the world's first virtual world Banking License auction. After months of active bidding, the five licenses sold for a total of $404,000 USD to a mix of real world banks, Entropia participants, and entrepreneurs, all seeking to invest in the virtual realm. Uniquely, the banks have integrated services within the mechanics of Entropia Universe and do not function merely as virtual advertising spots. Four of the bank buildings and their functionality were introduced into Entropia Universe on 9 October 2007, with the fifth being postponed until Version Update 9.1 on 11 December 2007 .
On 30 May 2007, it was announced that Entropia Universe had been chosen by the Beijing Municipal People's Government supported online entertainment company Cyber Recreation Development Corp. (CRD) to create a cash-based virtual economy for China, creating the largest virtual world ever. The landmark deal was negotiated for almost a year and will bring an outside virtual world into China for the first time. Entropia Universe was chosen over several other proposals, including one by Second Life.
The new project will permit up to 7 million concurrent users logged into the virtual universe, with an overall aim to attract some 150 million users from all over the world, and is expected to generate over $1 billion USD annually in commerce from this partnership. It is also estimated that the project will generate some 10,000 qualified job opportunities in China.
The technology introduced with this project will enable other companies within media, film, music and gaming industries, or other content providers, to acquire their own planet within Entropia Universe. A number of the world's largest corporations within the aforementioned business sectors are currently in negotiations to purchase their own planet within Entropia Universe. On the technical side, the server structure running the Entropia Universe will be one of the fastest on Earth.
On 25 July 2007, MindArk announced that they had signed a license agreement to use the high-tech game engine CryEngine 2, from German developer Crytek, with the intention of making Entropia Universe the "closest-to-reality looking massively multiplayer online game ever seen". The transition to a platform built around this new technology was expected to be finished by mid-2008, however as of March 2009 no firm release date has been announced. According to Jan Welter Timkrans, "The upgrade of Entropia Universe will be built around the spectacular features supplied by CryEngine 2, offering a complete and immersive experience to Entropia participants." The features offered by CryEngine 2 include real time editing, bump mapping, dynamic lights, network system, integrated physics system, shaders, shadows and a dynamic music system.
On 4 December 2007, MindArk PE announced its intention to go public and that it was in the process of preparing for its upcoming initial public offering (IPO), which it stated will likely include an offering of newly issued registered shares as well as existing shares. MindArk intends to use the proceeds from the newly issued shares to implement its growth strategy, in particular the expansion of its market position and pursuit of potential acquisition opportunities. MindArk has appointed Credit Suisse to help the company evaluate its strategic alternatives including planning for the IPO.
On 10 August 2009, MindArk/First Planet Company announced that Entropia Universe servers will go off-line on 17 August 2009 00:00 UTC in preparation for the implementation of Version Update 10.0 (The CryEngine 2 Update), and will go live again with the new graphics engine a few days later. Participants will have an option to once again change their avatars appearance. Traditional, Http-based client update software will be provided on 17 August 2009, while BitTorrent update pack (already listed at TPB & OpenBitTorrent trackers) is available from 14 August 2009. It's first time MindArk/FPC used BitTorrent distribution model; two days later company expanded it via Content Delivery Network, using Entropiaforum's hosting as additional mirror resources.
On 18 August 2009 Version Update 10 was released officially upgrading Entropia Universe to the CryEngine 2.