Founded in 1993, VR-1 was initially focused on massively-multiplayer online games such as Fighter Ace and UltraCorps they developed for Microsoft's Zone.com online game service.
In 1995 they acquired Gemsoft, based in Toronto and St. Petersburg, (thus becoming VR-1 Group) and began working on the VR-1 Conductor networking technology.
They began focusing on console development in 1999 when they acquired POW Games in Japan and Devil's Thumb Entertainment. They began work on Xbox titles at that time.
They were acquired in 2001 by PCCW Japan (f/k/a Jaleco) and restructured in 2002 to merge with Jaleco USA to create Jaleco Entertainment.