Larian's first project was called The Lady, the Mage and the Knight. However, they were unable to gain the recognition of any publishers as none believed they were capable of creating a game.[4] In order to rectify this and to prove them wrong, they developed LED Wars, a strategy game that was developed within 5 months and published by Ionos in 1997.[5] As a result, The Lady, the Mage and the Knight soon evolved into a collaborative project between Larian Studios and Attic Entertainment Software. Due to various problems between the two development studios and its publisher, the project was abandoned in 1999

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