Spellbound was founded in Germany in 1994 by Armin Gessert (who has been active in game development since 1984 - working on the Giana Sisters series). The company initially assisted Attic Entertainment on graphics for Realms of Arkania III: Shadows over Riva, a game in The Dark Eye pen & paper RPG. This Their first original titles was Airline Tycoon, released in1997. While the game never enjoyed a huge commercial success, it gained a cult following over time and saw the release of a budget and deluxe version.
The company went on to develop two games which were heavily inspired by the genre-defining and very successful Commandos series. Desperados, set in the wild west, which spawned a sequel, as well as Robin Hood : The Legend of Sherwood, which was less successful than Desperados but received critical acclaim for technical merits, such as the cut scenes and the graphics engine.
Their two subsequent releases flopped on the market (Chicago 1930 and Smoking Guns) and after releasing the moderately successful, if eagerly anticipated, sequel to Desperados, Spellbound was dropped by their publishers ( ATARI) and they had to find new publishing deals.
Spellbound Entertainment went into administration in 2012 and were re-founded as Black Forest Games.