Blackbird was founded in 2007 by former members of Relic Entertainment and EA Canada. CEO Rob Cunningham and chief creative officer Jon Aaron Kambeitz had also been founding members of Relic, and had been on the development team for the 1999 RTS Homeworld and its 2003 sequel, Homeworld 2. In 2010, after beginning operations, Blackbird began working on a game they considered a "spiritual successor" to Homeworld, entitled Hardware: Shipbreakers. The studio entered into negotiations with THQ, which controlled Relic, for adapting their original game into a Homeworld game, but were unable to secure access to the intellectual property.

THQ went bankrupt in April 2013, and sold off its assets at auction. Blackbird and Gearbox Software were among the bidders for the IP rights to Homeworld; Gearbox won the auction at $1.35 million. Gearbox allowed Blackbird to use the Homeworld IP and invested in the Hardware: Shipbreakers project, which was renamed Homeworld: Shipbreakers in September 2013. In December 2015, it was officially announced for release as Homeworld: Deserts of Kharak; it was released on January 20, 2016.

In February 2017 Blackbird announced a collaboration with NASA's Jet Propulsion Laboratory to create Project Eagle, and interactive art model of a base on mars to be demonstrated live on stage at the 2017 D.I.C.E. Summit.