Prepar3D is Lockheed Martin's continuation of the commerical-grade version of Microsoft Flight Simulator series.
Following the closure of the internal development studio of the Flight Simulator series at Microsoft (ACES Game Studio) in 2009, Lockheed Martin licensed the code from Microsoft and hired a number of the laid off staff to continue development of the series under a new name.
The first version of Prepar3D was released on November 2010. It introduced a bathymetric layer to the world simulation allowing for pilotable submersibles. It also brought improvements to other areas of the world model.
Prepar3D v2 was released in November 2013. It overhauled the entire game engine to support DirectX 11 as well as modern multi-core CPUs, and with it a vast range of lighting and other rendering features were added (cloud shadows, volumetric fog, specularity, HDR lighting, tone mapping, etc.)
Prepar3D v3, released September 2015, added a new Avatar Mode with support for navigating outside of pilotable craft in both first- and third-person views.
To date, all versions of Prepar3D have been sold separately, with no upgrade offers made available to consumers, and old versions continuing to be made available alongside the latest edition.