The titular Daikatana takes its name from the fabled Infinity +1 Sword from a Dungeons & Dragons campaign John Carmack ran around the same time that id Software was developing Doom. As detailed in the novel Masters of Doom, John Romero's character traded a plot-vital MacGuffin, a demon-summoning tome, for the sword in question, which eventually led to a Total Party Kill as the tome was used to summon an army of demons (literally, every demon in the books, several times over) to infest the realm, leading to the destruction of humanity.
Creator Backlash: John Romero has nothing nice to say about the "bitch" ad that soured his relationship with gamers.
Creator Killer: The game didn't make anyone John Romero's bitch as he wanted it to; it made Romero its own bitch and took his name and career down with it. A combination of this game and the earlier RTS Dominion: Storm Over Gift 3 also contributed to the closure of Ion Storm's Dallas office; not only was Dominion a huge flop on its own, but the internal squabbling its development caused at Ion Storm was partially responsible for turning Daikatana into what it is, mostly thanks to how Ion Storm wanted to get Dominion out of the door as soon as possible so they could have some more cash for Daikatana. The Austin office managed to survive mostly by having absolutely nothing to do with the development of Daikatana, only finally folding in 2005 simply because the senior staff left after their six-game deal with Eidos.
Despite the success he'd enjoyed with Doom and its progeny at id Software, John Romero was unhappy with his job because he felt his vision as a designer took a back seat to the company's technological considerations. When his idea to split the company into separate divisions devoted to design and technology was nixed by the founders, he threatened to leave and start his own company instead, and was eventually let go.
Carrying out his threat, he and id cofounder Tom Hall started what became Ion Storm at the end of 1996, where "Design is Law." On the strength of their names and accomplishments, the company was able to raise millions. Some of this was spent on high-cost real estate, renting office space in the top floors of a Dallas skyscraper, featuring the Ion Storm logo carved into terrazzo in the lobby because, Romero said, he had always wanted to work in flashier offices at id. But all did not go well from that auspicious start.
Romero's dream game, Daikatana, would be the sort of First-Person Shooter he had pioneered, but with two sidekicks and multiple levels in four different time periods across a 4,000-year period. He told the media it would be available within a year, since the plan was to build it on the Quake engine. As you might expect, such an optimistic prospect was just asking for trouble.
First, Ion Storm had some internal warring because the Daikatana team felt the development of Dominion: Storm Over Gift 3 was stealing resources and staff, which ultimately hurt that game and forced the abandonment of the other early titles Ion Storm meant to bring out.
Then, they tried to move from the old Quake engine to the Quake II one, a process much more complicated and time-consuming than they thought. In June of 1997, they made it official Daikatana would not be shipping that year. That didn't stop the company from taking out ads that cheekily promised "John Romero's about to make you his bitch", alienating some gamers and ramping up expectations for others. Romero has since apologized for the campaign and tried to distance himself from it; others involved say he was much more enthusiastic at the time.
Romero's prowess as a designer and programmer, despite his experience at well-managed id, did not transfer to management or leadership skills. His entire development team quit on him en masse to start their own company because they were so fed up with the lack of direction they were getting. To maintain goodwill with potential competitors, Romero avoided hiring away any of their programmers, instead hiring amateur programmers whose homebrewed levels for id's games had been the most downloaded a fact which, another Ion Storm executive admitted later, told them nothing about what it was like to work with this person or what their work habits were. During the development of the game, the staff changed completely three times.
This turnover had a chaotic impact on the game code, with fragments inserted here and there by totally different people who had never communicated. Demos made from this increasingly buggy mess failed to impress at industry events. Communications between all the people working on the game did not get any better: one artist submitted the infamous "1,300-pixel arrow", a texture file for a crossbow bolt that was inexplicably 1300 pixels by 960 pixels. note For reference, that's about the size of your monitor, twice as large as the game's actual resolution, and a hell of a lot larger than the space a crossbow bolt actually takes up. When Romero hired his then-girlfriend, Stevie Case, to work on level design, he nearly triggered another full-staff walkout.
The programmers who were working had some unexpected physical problems with the skyscraper office space. Some of them were under skylights where, around midday in the Texas sun, they would get too hot to work, and even if they didn't the light was too distracting. People were covering their cubicles in blankets to get their work done.
Ion Storm missed Daikatana's 1997 ship date, and its 1998 ship date, and its 1999 ship date. It became a punchline within the industry, as one webcomic memorably demonstrated. Eidos, Ion Storm's parent company, finally had to step in and straighten things out. And as things were finally turning out, id released the Quake III game engine. Recalling how much fun they had had three years earlier upgrading to its predecessor, Ion Storm understandably opted not to do it again, meaning the game they had poured so much design effort into would be technologically behind from the moment it was released.