Rooster Teeth began in Austin in 2003. Its founders were Burnie Burns, Matt Hullum, Geoff Ramsey, Jason Saldaña, Gus Sorola and Joel Heyman. Its first show, Red vs. Blue, was a comedy shot inside the Halo video games. It went online two years before YouTube existed and helped popularize machinima, a way of making films inside game engines. The company got its name from a line in the show's first trailer.
The company ran its own subscription service from early on, and it waited until late 2008 to join YouTube. Burns told the Guardian he had seen YouTube as a competitor. By 2014 its main YouTube channel drew 879 million views a year. That April, Rooster Teeth signed a two-year lease on Stage 5 and Bungalow A at Austin Studios, the Austin Film Society's campus on East 51st Street, and it stayed at 1901 E. 51st St. until the end. In 2011 it started RTX, a fan convention in Austin.
Fullscreen bought Rooster Teeth in 2014. Fullscreen was later folded into Otter Media, a joint venture of AT&T and the Chernin Group, and the studio ended up inside WarnerMedia when AT&T took full control. Under these owners the company grew well beyond machinima. It made the animated series RWBY and gen:LOCK, the second of which brought in Michael B. Jordan as its voiced lead and co-producer. It also made the documentary series RT Docs, the live-action series Day 5 and Immersion, and the gaming division Achievement Hunter. Its first feature, Lazer Team, came out in 2016. Lazer Team 2 was shot in Austin in 2017 as a YouTube Red original. Its subscription service, renamed First in 2016, peaked at about 225,000 paying members.
Staff grew past 400; the company reported 419 employees in July 2019. That September it laid off about 50 people, its first broad cutback. WarnerMedia then installed Jordan Levin, a former CEO of the WB, as general manager, and the founders moved into creative roles. Burns left in 2020. In 2022, Discovery's purchase of WarnerMedia made Rooster Teeth part of Warner Bros. Discovery.
On March 6, 2024, after failed attempts to sell the studio, Levin told staff it would shut down. He cited 'fundamental shifts in consumer behavior and monetization across platforms, advertising, and patronage.' Variety reported that about 150 full-time employees would lose their jobs, that First was down to about 60,000 members, and that the company had lost money for a decade. A WARN notice listed 133 Austin-area layoffs between May and July 2024.
Warner Bros. Discovery sold the pieces separately. The Roost podcast network went to the talent firm Night, and RWBY went to Viz Media. In February 2025, Burns's company Box Canyon Productions bought the Rooster Teeth brand, website and channels and announced plans to restart production.