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The game had a development budget of $2.5 million.[13] Ultima Online is the product of Richard Garriott's idea for a fantasy game involving several thousand people who can all play in a shared fantasy world. Prior games allowed hundreds of people to play at the same time, including Habitat (beta-tested in 1986), The Realm Online, Neverwinter Nights (the AOL version) and Meridian 59; however, Ultima Online significantly outdid these games, both graphically and in game mechanics. Garriott commented that "it was very important to us that Ultima Online be a game with a theme, and story, and quest - and then support larger, grander activity. We don't want it to be just player controlled and dominated; we want it to be an Ultima experience, with all the qualities that people expect from that. Ultima Online will be, I believe, the very first ever completely virtual world for the mass public to go live out alternate lives in."[14] The goal was to offer the player as much freedom as possible.[15] The initial team was composed of Garriott, Starr Long, Rick Delashmit, Scott Phillips and, a bit later, Raph Koster, who became the lead designer. Koster wrote public "designer letters" and usually went by his nickname of Designer Dragon. Koster drew inspiration from prior online games,[16] such as DartMUD.[17]

Ultima Online: Kingdom Reborn was a client Ultima Online created in 2007 with updated graphics. Kingdom Reborn was not considered an expansion pack and could be downloaded for free. A series of clues provided by developers via an in-game event arc allowed players to find a URL on the Ultima Online website wherein a simple message was contained as well as a Flash movie featuring screenshots of the upgraded graphics. In addition to the upgraded graphics, there was a newer, more streamlined interface. Some of the changes included hot keys, a scrolling bag configuration and a new character sheet.

Shadowclan is a guild that gained notoriety within the online gaming community[80] in 1997 by taking the place of non-player character orcs in Ultima Online.[81] Former clan administrator Ogur was interviewed about Shadowclan in Massively Multiplayer Games For Dummies.[82] A reference to Shadowclan was written into the official Dark Age of Camelot documentation.[83] 2b1af7f3a8