Splash Damange was founded in May, 2001 by Paul Wedgwood consisting primarily of members of the "mod" community, gamers that modify pre-existing games to create anything from new levels to entirely new games. Their first project was to collaborate with Network of the World and Gamer.tv to create custom maps and a method of broadcasting matches live for Quake III Arena. They ended up producing over 150 TV shows using this technology. Next they made more maps for Counter-Strike, Quake III Arena, and Return to Castle Wolfenstein for Games Domain, including the popular Wolfenstein map "Marketgarden".
In June 2003, under id Software, Splash Damage developed all of the multiplayer maps for Doom 3. They later went on to use that experience in developing Enemy Territory: QUAKE Wars, which shipped in October 2007.
In May 2008, in partnership with Bethesda Softworks, Splash Damage announced that they were working on Brink for the Xbox 360, Playstation 3, and PC. The game was released on the 10th of May 2011, to a mixed critical reception.
In trivia, the studio was famously grounded by ash from Icelandic volcano Eyjafjallajokul and was unable to make it to Bethesda's May 2010 publisher event in Las Vegas where a live demo of Brink had been planned.
In July 2013 it was announced that Splash Damage would be working on the multi-player mode for Batman: Arkham Origins.
In August 2016 the company was purchased by RAdius Maxima, a subsidiary of Leyou. The company agreed to provide funding up to a maximum of $10m USD for unannounced projects by Splash Damage.
In December 2018 CEO and co-founder Paul Wedgewood stepped down after 17 years, to be replaced by co-founder and chief marketing officer Richard Jolly. Wedgewood subsequently left the games studio.