Factor 5 was founded in Cologne, Germany in 1987 by five gaming enthusiasts. They have earned a reputation in the video game and technology industry as one of the front-runners in developing exciting games and cutting edge technology for a variety of platforms. Factor 5 goes to the very limit of each platform they have ever worked on and produces games which stand out for their technical excellence and playability.

Factor 5 found early success with Katakis (Denaris in other countries) in 1988, a technologically revolutionary game inspired by the arcade hit R-Type. Not only successful on its own merits, but good enough to earn the team the exclusive conversion rights of R-Type for the then hugely popular Amiga.

The breakout success for Factor 5 was 1990’s Turrican. This game became an instant hit and eventually turned into a franchise spawning several sequels on virtually all then-popular gaming platforms. To this day, Turrican has a strong cult following which was proven when Super Turrican, Super Turrican 2, and Mega Turrican were re-released for Nintendo's Virtual Console on the Wii platform in 2008. The gaming community eagerly awaits the day when Factor 5, which retains rights to develop future versions of the franchise, will release a new Turrican game.

In 1994, Indiana Jones - Greatest Adventures for Super Nintendo, marked the start of a decade long collaboration with LucasArts Entertainment that changed the lives of the Factor 5 team forever. When work was finished on Star Wars: Rebel Assault II (1996) for the Sony Playstation, it became clear that the developer was too far away from their publisher, LucasArts. A significant part of the German studio packed their bags and found a new home in Marin County, CA, which is the hub of all of George Lucas' activities.

After the opening of the California-based studio, they continued to develop highly successful games for LucasArts Entertainment, based mainly on the two most popular franchises, Star Wars and Indiana Jones. While Indiana Jones and the Infernal Machine (2000) re-imagined the famous archeologist for the Nintendo 64, Factor 5 invented accessible free-flight action games with the creation of Star Wars: Rogue Squadron (1998). One of the most successful Star Wars games of all time, the N64 and PC classic launched a franchise: Star Wars: Rogue Squadron II - Rogue Leader (2001), a system launch title created by the team in only 9 months on prototype hardware, and Star Wars: Rogue Squadron III - Rebel Strike (2003) are heralded as two of the best and technologically most impressive games ever made for the Nintendo GameCube.

Meanwhile, the company's technical expertise led to the development of two Factor 5 exclusives: MusyX and DivX. MusyX, in close collaboration with Dolby Labs, brought high-quality 7.1 surround sound to a variety of Nintendo gaming platforms, while with the introduction of DivX Factor 5 brought the ultimate video-playback solution to the Nintendo GameCube. These were a direct result of a more than decade-long close collaboration between Factor 5's founders and Nintendo in hardware, OS, and tool development, starting with the Nintendo 64 and continuing with the GameCube, Wii, and 3DS.

In 2005, Factor 5 started an exclusive partnership with Sony Computer Entertainment which lasted for 3 years. They were part of Sony's PlayStation 3 hardware and OS technology team and held up their reputation of stretching the limits of any new system with the release of a key title for the PlayStation 3: LAIR (2007), the controversial first title on the Sony platform to anticipate and embrace the sweeping wave of change that motion control and other new input methods would bring to video games with the arrival of the Nintendo Wii and Apple's iOS devices.

In 2008, due to massive changes in the game industry and the unexpected closure of several publishers, Factor 5's studio in Marin County had to stop production on multiple major titles, resulting in a closure in early 2009. Factor 5's spirit of excellence though lives on in several new ventures by its team members, both in cutting-edge technology and design that have reached and entertained many millions of living rooms.