Chris Roberts, the designer behind the Wing Commander games at Austin's Origin Systems, founded Digital Anvil in 1996. He told the press it would return to the smaller studio system he believed made better games. The Austin Chronicle described the company in January 1998 as a combined effort by Roberts and Austin filmmaker Robert Rodriguez. It was based at 316 Congress Avenue downtown and split its time three ways: making games, doing the digital effects for Roberts's Wing Commander feature, and serving as a post-production house for Rodriguez's next project.
'Basically, we were set up to make games and movies based on universes and properties that we created,' Roberts told the paper. He was shooting the Wing Commander film in Luxembourg for Fox while the effects were done in Austin. The studio had about 27 effects artists, many of them on contract from Los Angeles, plus AVID editing stations, SGI workstations and a screening room equipped for THX and Dolby Digital. 'I guess we're probably the only effects facility in Texas that can handle high-caliber feature effects,' Roberts said. He added that the company was open to working with other filmmakers, such as Richard Linklater, when its equipment was free. Two blocks away, Linklater had just opened his own Austin Film Center, and he joked that Austin had gone from zero screening rooms to two within a block of each other.
Wing Commander was released in 1999, and the studio turned back to games. Microsoft, which had worked with Digital Anvil since 1997, announced on December 5, 2000 that it would acquire the company. It said Digital Anvil would keep making titles from its Austin headquarters. Roberts left soon after but consulted on games in development. Microsoft sold two projects to Ubisoft and turned Brute Force into an Xbox exclusive. Starlancer had come out in 2000, and Freelancer, the studio's best-reviewed game, arrived in 2003 along with Brute Force.
On December 1, 2005, Microsoft confirmed to GameSpot that it was shutting the Austin studio and centralizing its resources in Redmond, Washington. The company said it would try to place each employee at Microsoft Game Studios headquarters if they chose to move, with the redeployment final on January 31, 2006. Brute Force was Digital Anvil's last game.