Development
Development of System Shock 2 began in 1997 when Looking Glass Studios approached Irrational Games with an idea to co-develop a new game. The development team were fans of System Shock and sought to create a similar game. Early story ideas were similar to the novella Heart of Darkness. In an early draft, the player was tasked with assassinating an insane commander on a starship.
The title took 18 months to create with a budget of $1.7 million and was pitched to several publishers, until Electronic Arts—who owned the rights to the Shock franchise—responded by suggesting the game become a sequel to System Shock. The development team agreed; Electronic Arts became the publisher and story changes were made to incorporate the franchise. The project was allotted one year to be completed, and to compensate for the short time frame, the staff began working with Looking Glass Studio's unfinished Dark Engine, the same engine used to create Thief: The Dark Project.
The designers included RPG elements in the game. Similar to Ultima Underworld, another Looking Glass Studios project, the environment in System Shock 2 is persistent and constantly changes without the player's presence. Paper-and-pencil role-playing games were also influential; the character customization system was based on Traveller's methodology and was implemented in the fictional military branches which, by allowing multiple character paths, the player could receive a more open-ended gameplay experience. Horror was a key focus and four major points were identified to successfully incorporate it. Isolation was deemed primary, which resulted in the player having little physical contact with other sentient beings. Secondly, vulnerability was created by focusing on a fragile character. Lastly were the inclusion of moody sound effects and "the intelligent placement of lighting and shadows". The game's lead designer, Ken Levine, oversaw the return of System Shock villain SHODAN. Part of Levine's design was to ally the player with her, but he also believed that game characters were too trusting, stating "good guys are good, bad guys are bad. What you see and perceive is real." Levine sought to challenge this notion by having SHODAN betray the player: "Sometimes characters are betrayed, but the player never is. I wanted to violate that trust and make the player feel that they, and not the character, were led on and deceived." This design choice was controversial with the development team.
Several problems were encountered during the project. Because the team comprised two software companies, tension emerged regarding job assignments and some developers left the project. Additionally, many employees were largely inexperienced, but in retrospect project manager Jonathan Chey felt this was advantageous, stating "inexperience also bred enthusiasm and commitment that might not have been present with a more jaded set of developers." The Dark Engine posed problems of its own. It was unfinished, forcing the programmers to fix software bugs when encountered. In contrast, working closely with the engine code allowed them to write additional features. Not all setbacks were localized; a demonstration build at E3 was hindered when it was requested all guns be removed from the presentation due to then-recent Columbine High School massacre.
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