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The company was founded in 1989 by Bob Bates and Mike Verdu after the end of Infocom. Their goal was to design interactive fiction in the Infocom tradition. Their first products were all illustrated text adventures, some of them designed by Infocom veteran Steve Meretzky. Starting in 1993, they switched to a new development system for graphic-only adventures. Several of their adventure games were based on book licenses, including Frederik Pohl's Gateway, Terry Brooks' Shannara, Spider Robinson's Callahan's Crosstime Saloon, Piers Anthony's Xanth, and Margaret Weis and Tracy Hickman's The Death Gate Cycle.
The company was acquired by GT Interactive in 1998 and began changing their focus to action games. They developed a first-person shooter based on Robert Jordan's The Wheel of Time and finished the development of the second part in the Unreal series in 2002. Late in 2003, they released a free expansion for Unreal II, known as XMP (eXpanded MultiPlayer).
On Friday, January 16, 2004, Legend Entertainment was shut down. A brief press release from Atari cites that it was "purely a business decision", and that "Legend had recently completed its only current project and had no new projects in the pipeline". Sources close to the company state that Legend was in fact working on a new project, though it has not been officially confirmed. Fan reaction to Atari's decision has been rather sour, prompting the creation of a petition demanding that Atari continue to support Legend's games, among other things. It is unknown what further action, if any, Atari plans to take in this matter.
- Spellcasting 101: Sorcerers Get All The Girls (1990)
- Spellcasting 201: The Sorcerer's Appliance (1991)
- Timequest (1991)
- Gateway (1992)
- Spellcasting 301: Spring Break (1992)
- Eric the Unready (1993)
- Gateway 2 - Homeworld (1993)
- Companions of Xanth (1993)
- Death Gate (1994)
- Superhero League of Hoboken (1994)
- Mission Critical (1995)
- Shannara (1995)
- Callahan's Crosstime Saloon (1997)
- John Saul's Blackstone Chronicles (1998)
- Star Control 3 (1996)
- Unreal Mission Pack: Return to Na Pali (1999)
- Wheel of Time (1999)
- Unreal II: The Awakening (2003)
- Unreal II: eXpanded MultiPlayer (2003)