After programmer John Carmack and three of his fellow Softdisk employees — John Romero, Adrian Carmack (no relation to John), and Tom Hall — developed a Super Mario Bros. 3 mockup around a Platform Game engine he'd created (called Dangerous Dave in Copyright Infringement), the group struck out on their own and founded id Software. They were major supporters of the Shareware distribution model, and it paid off; at one point in the early '90s, the first episode of Doom was on more hard drives than Microsoft Windows.
John Carmack was the last of the original founders to remain with the company, finally leaving a month shy of twenty years to the day Doom was released. In his time with id, he has earned a reputation as one of the industry's most brilliant programmers. As a result of his "programming first" mentality — he once commented notoriously that stories in video games are like stories in porn; they're expected to be there, but aren't important — many id releases are tech demo games that show off the features in a new engine, which they then license out to other developers.
It's worth noting that, whenever a new IdTech engine is built, the previous one is released under the open-source GNU General Public License, thus continuing id's legacy in Warsow, Nexuiz, Xonotic, Alien Arena, Urban Terror (previously a Quake III: Arena Game Mod) and OpenArena, among others.
In June 2009, id Software became part of Zenimax Media (who also houses developers Bethesda Game Studios, creators of The Elder Scrolls saga, Tango Gameworks, MachineGames, and others). In 2011, id announced that it would no longer be licensing out its idTech engines, though still releasing previous versions. Carmack, ever in search of new challenges, is now working for the Occulus Rift project.
For the record, it's pronounced as one syllable ("ihd", with a short i, not "eye-dee"), after the part of the Freudian psyche that deals with instinct and pleasure-seeking. In other words, perfect for a company making games.
Among the games id Software has developed or published or produced:
- Catacomb 3D A New Dimension
- Commander Keen series
- Dangerous Dave
- Doom series
- Hexen and Hexen II
- Hovertank 3D
- Id Anthology (consists of 19 games id Software has made note and many collectible items)
- Orcs And Elves
- Quake series
- Rescue Rover
- Rescue Rover 2 (See Dognapped!)
- Shadow Knights
- Wolfenstein series