1985: The very first racing game with simulation pretensions was probably REVS, a Formula 3 sim by Geoff Crammond that ran on the Commodore 64 and BBC Micro. REVS had a big fan base in England, but was virtually unheard of in the US.
At the time no racing simulation was even close to match REVS in realism. The original BBC Micro version included just one track - Silverstone, while the C64 port added a 2nd track, Brands Hatch.
1987: The sequel to REVS was more of an expansion rather than a true new game, adding a few more options such as adjusting front and rear wings, as well as including four new tracks to the original two. It also came with computer-assisted steering and better joystick support.
1989: Sim racing is generally acknowledged to have truly really taken off with the introduction of Papyrus' Indianapolis 500: The Simulation on 16-bit PC hardware. Although it only included one track, simmers could race the full 500 miles of the world famous Indy 500, where even a blowout after 450 miles would take the player out of the competition. This racing simulation was successful, selling over 200,000 copies, and pushing the racing simulator genre into the mainstream.
1992: The next major milestone was the release of Formula One Grand Prix (AKA World Circuit in North America) by MicroProse, also developed by Geoff Crammond. This moved the genre along significantly. Multiplayer was made possible by allowing different drivers to take turns, and two racers could also hook up their machines for racing via a null modem cable.
The game offered a completely new experience for players at the time. The accurately modelled tracks meant that the player could actually recognise their location on the real-life circuit. The detailed physics engine provided a more realistic driving experience than had been seen before, drivers could easily experience the differences in handling depending on how you entered a corner and how soon or late you accelerated out of it.
1993: Papyrus followed up their Indy 500 success with IndyCar Racing and offered very tough competition to Microprose's F1GP hit. Shipping with eight official IndyCar tracks, Papyrus later released seven more tracks via an expansion, and a final expansion included the Indy 500 track once proper licensing rights were secured. The final expansion also included a paintkit, allowing visual customization. IndyCar Racing sold around 300,000 copies, a respectable figure, but not what Papyrus was hoping for.
1994: Introducing the growing legion of open-wheel racing sim fans to the world of NASCAR stock racing was a great move by Papyrus. NASCAR Racing simply blew away the competition, eventually selling in excess of 1,000,000 units and proving that perhaps this ultra-realistic racing concept wasn't a niche market after all. Its beautiful SVGA (640x480) resolution turned heads and made this the first sim where cars no longer looked like boxes. It keyed in on sophisticated physics modeling, and was the first sim where drafting/slip streaming was introduced.
Moreover, the first real online racing started with NASCAR 1 using the "Hawaii" dial-in servers and it was not uncommon for these early sim racers to have $300 to $1500 phone bills. Online racing had seen its first true realization, and to many, this was the dawn of "real" sim racing.
1995: Riding the monstrous critical and financial success of NASCAR Racing, Papyrus was now able to pump out its games at a faster clip and call even more shots. IndyCar Racing II arrived one year later and immediately proved that Papyrus wasn't going to rest comfortably on its throne. David Kaemmer and his growing team improved substantially on the first IndyCar and transferred much of NASCAR Racing back into an open-wheeled format. The game was definitely more difficult--and therefore rewarding--than the original, with far more complex car models and a much greater sense of danger.
Unfortunately, the game came out as the PC industry was very slow at adopting 3D accelerator cards, and the real-life ugly IndyCar split into IRL and CART rivals certainly pushed many fans away from the sport. Sales were very low, selling only 180,000 copies and causing Papyrus to abandon this series.
1995: MicroProse released the successor to F1GP, Grand Prix 2, to much anticipation. GP2 became successful not just because of its detailed and thorough simulation of the 1994 Formula 1 season, but also because it was very customizable, including way of the online community. Players could change everything about the game: drivers, teams, graphics, physics, car shapes, and eventually even the racetracks. GP2 quickly soared to the top of the charts in 1996 as perhaps the finest open-wheeled sim ever devised.
If featured many first in the genre, such as use of Advanced SVGA graphics (800x600), unparalleled AI and physics, very detailed and almost photo-realistic tracks, as well as more advanced engine, gearbox and electronic failures that added to the realism.
1996: When Papyrus released NASCAR 2, they further improved upon the original, and the number of sim racers exploded. The TEN multiplayer hosting service was introduced and the online sim racing community grew. Even though its physics engine was unchanged, the sequel introduced enough new additions to the series to make it Papyrus' second highest selling game, with over 800,000 copies.
1997: Even Microsoft jumped into the competition with the overly ambitious CART Precision Racing, a flawed and buggy, but promising title that in some ways wasn't in the same league as the genre's heavy hitters; however, it sported some likable elements and it did go to show how quickly the field was opening up.
1997: One of the very first racing sims to fully support 3D graphic accelerator cards, Ubisoft's F1 Racing Simulation visually toyed with everything that had come before. The environmental effects were particularly impressive, especially the variable weather, animated clouds, and mesmerizing depiction of lens flare. The car models were both accurate and responsive, and the AI was plausibly reactive to given situations. Even by today's standards, the game looked great and drove magnificently.
Unfortunately, this fine release was all but ignored in the North American market.
1998: The biggest online milestone to racing simulations was the release of Grand Prix Legends from Papyrus, based on the 1967 F1 season. It was hailed as outstanding in all areas, but especially the physics and online multiplayer capability. For many, their first real experience with online racing was GPL, or the later variants of NASCAR that used the GPL engine. The release of a third-party add-on, VROC (Virtual Racers Online Connection), allowed racers to join together online and race in leagues.
GPL may well have been Papyrus' finest hour. The experience of driving a Grand Prix Legends car was unlike anything that had preceded it, as Dave Kaemmer and gang completely scrapped the respected but aging Papyrus physics engine and rebuilt it piece by piece, from the ground up.
One problem--the game was simply too difficult for the majority of players. Kaemmer himself said at the time that, "Driving a 1967 GP car is more difficult than driving just about anything else, and the simulation is more difficult than driving a real car...many people think that it feels like driving on ice."
Nevertheless, Grand Prix Legends was--and quite likely still is--the ultimate in extreme realism. Its fan base remains one of the most devoted of any game from that era, and its long list of updates and patches have kept it current with today's hottest hardware. Still, its comparatively and unexpectedly poor showing did not sit well with Sierra, the company that owned Papyrus and published its products.
1999: The first racing sim by newcomer developer Image Space Incorporated (ISI) was based on GT racing and was well received thanks to its great realism, albeit its graphics appeared aged even upon its release. And unlike the Papyrus sims, the physics are easily modified, and a large community has developed dedicated to modifying ISI-developed games including Sports Car GT.
2000: After years of development, Microprose released Grand Prix 3, which used a more modern graphics engine and featured the same customizable structure of GP2. GP3 was ultimately seen as a bit of a disappointment though, for much of the original GP2 that had long been outclassed was still apparent. Still, its similarity allowed easy track conversions back and forth.
2000: Racer was first released in August 2000, and has been continuously updated up to the present day. Over the years, a community has grown around Racer. The main forum for Racer is at Race Sim Central Forums.
The Racer software is free, in the sense of freeware (for non-commercial users). While the source code of an older version is available, it is not under an open source license. The cars and tracks have various forms of license, but can all be downloaded for free.
2001: Even though ISI developed F1 1999 and 2000 under its EA Sports banned after its Sports Car GT success, it wasn't until the 2001 edition where it could stand up as a true competitor to rival Grand Prix 3. This release boasts new physics and graphics engines which actually model and take into account track irregularities and bumps, and add some extras like fully animated 3D pit crews.
2001: Sierra, the publishers of the Papyrus NASCAR series, was quite dissapointed with low sales of the very difficult Grand Prix Legends and its new physics engine that they refused Papyrus to adopt that engine in NASCAR Racing 3. But since the third game in the series was viewed poorly for its dated engine, Sierra finally gave Papyrus the green light and NASCAR Racing 4 was the first in the series to use the very advanced GPL engine.
From a physics standpoint, NASCAR 4 confirmed that Papyrus could do precisely what it said it could do with the GPL engine. To quote Kaemmer, "It was definitely a vindication of the physics engine when Nascar 4 was so well received." In simple terms, NASCAR 4 could be anything you wanted it to be. Indeed, if all drivers' aids were used and alternate modes explored, it was the most approachable NASCAR to date. But if you wanted to hike up the difficulty and experience terrifying authenticity, you could do that too.
2002: With great backing from EA Sport, ISI kept working on yearly F1 releases, pushing the envelope each time in both ease of use (with very forgiving arcade driving aids) as well as adding more realism and improving graphics of the series for the more experienced racing sim driver.
2002: After the criticism received by GP3 for not advancing the series, Grand Prix 4 featured a heavily revised graphics engine and updated physics including wet weather driving that even today is considered some of the best to ever be simulated in a racing game. However it entered the market at a far less hospitable time than its three predecessors, as ISI's F1 2002 was winning rave accolades from fans everywhere.
Although the game could be considered a relatively modest commercial success, the chances of a further entry to the series are slim to none after Microprose's parent company, Infogrames, dissolved the developing studio shortly after its release.
2003: The last of Papyrus' 10-year NASCAR series could not have been any finer. With falling sales, NASCAR gave all licensing rights over to EA Sports who, despite several consecutive yearly releases, have yet to approach NASCAR Racing 2003's level of believability and authenticity.
Looking back, David Kaemmer is justifiably proud of the Papyrus heritage and in particular of sticking to his guns when things got tough. "I think most of our competitors through the years were always worried about how difficult it was, and would sacrifice the realism, figuring that if it was difficult, it wasn't fun."
2003: Live for Speed is an online racing simulator developed by a three person team. The main focus is to provide a realistic racing experience for the online multiplayer game and to allow dramatic single player race against AI drivers. Started in 2003, it is currently in its second phase of a 3-phase development cycle. It can be downloaded for free as a demo with 3 cars and one track, and more cars and tracks are opened up once you register online.
2003: After losing the official F1 licence to rival SCE Europe (publishers of Formula One series on PS/PS2), ISI developed this as their final release. Showcasing four full seasons of Formula 1 from 1999 to 2002, many people thought it would be a type of compilation of games previously made, but in fact it turned into a cult following for both modders and sim racers for years to come.
ISI listened to the fans and fixed almost every single aspect from previous versions, most noticeable was the sound which proved to be the most realistic to date. Also the cars models were changed and made from scratch for this release to make them more realistic. Track versions were created specifically for each season resembling the real circuits. It is as close to true F1 racing as one can get.
2004: Considered by many gamers to be one of the most realistic and difficult racing simulators ever created, RBR was developed by Warthog with direct advice from WRC champion Richard Burns. The game was originally an offline racing game but user created mods have enabled online play. A sequel to the game is unlikely, due to the death of Richard Burns in 2005. In addition, Warthog has since been sold to Gizmondo which went bankrupt, and publisher SCI was taken over by Eidos.
Because of the nature of the game, it is recommended for new players to attend the Rally School, where basic as well as advanced driving tricks are taught to all players. Techniques like left-foot braking and the Scandinavian flick are demonstrated step-by-step so a racing sim fan can attack the grueling stages full-out.
2004: GTR is a sports car racing simulator developed by SimBin. As a racing simulator, it attempts to recreate real-world physics as accurately as possible, rather than exaggerating speed and handling abilities for the sake of easier gameplay. All the licensed tracks were constructed from satellite data to improve accuracy, and the developers were helped by many teams in the GT- and NGT-classes. And as a bonus, the game engine produces and outputs telemetry data in a format that is usable by the telemetry software MoTeC -- a software tool used by real racing teams.
2005: Developers of the fan-favourite F1 Challenge '99-02, ISI released rFactor, a highly modifiable sim based on their gMotor2 physics engine. Notable for its initial download-only distribution model, rFactor originally released with fictional cars and tracks. ISI's encouragement of the enthusiast mod community has led to an unprecedented number of add-ons, including 800-horsepower-stock cars. Subsequent releases of rFactor featured Formula One cars and recreations of real track layouts under fictitious names.
rFactor aims to be the most accurate race simulator ever, providing advanced tyre modeling, complex aerodynamics and a 15 degrees of freedom physics engine.
2005: Developed by SimBin, makers of GTR, GT Legends has the same graphics engine as rFactor (developed by ISI), a similar physics engine, but different multiplayer code. In the press, it was highly praised for its exceptionally good quality sounds and realism.
2006: Despite this sequel winning dozens of awards, such as Racing Game of the Year, the award it won by Gamespot's dubious award says it best -- Best Game No One Played.
We get it: Racing sims are hard. The ever-shrinking market for PC-based racing games is a testament to the public's opinion about games that seek to faithfully reproduce motor racing, but for those willing to commit to the experience, GTR 2 is a real eye-opener.
2007: This indie racing simulator brings some innovation in racing simulation with its fully customizable physics model. An advanced tire model, suspension, motor and more are available to tune them in the game. The graphics engine supports True HDR rendering and FASS, and the developer announced their goal is to develop an innovative and advanced racing simulator with tools for understanding/tuning vehicle physics.
2007: Race 07 is a racing simulator from SimBin Studios, and the sequel to Race. Its officially licensed by the World Touring Car Championship (WTCC) and has spawned two expansions - GTR Evolution and STCC - The Game.
Race 07 features more than 300 cars in nine different racing classes and includes the full 2006 and 2007 seasons of FIA World Touring Cars championship, as well as 8 more classes on 32 tracks from all over the world.
2008: This recent release is an add-on for Race 07 through Steam, but the commercial DVD release includes the full Race 07 game, in addition to all the cars from the GT Grand Touring series. Developed by SimBin, the new powerhouse in real racing simulators, GTR Evolution in effect blends the WTCC licenses of the Race series with the GT license of its GTR franchise.
2008: Established by David Kaemmer and John W. Henry after the demise of Papyrus Design Group, the iRacing service has been in development for about four years, using code from Papyrus' NASCAR Racing 2003 Season as a starting point. This subscription-based online racing community aims to cater both to real-world racers and racing simulation enthusiasts, so they are trying to offer a realistic simulation of motorsport with accurate track, vehicle and physics modeling, and all of the cars and tracks are officially licensed.
iRacing creates each track using proprietary exactrac laser mapping technology to replicate the personality, eccentricities and challenges of the track with mathematical precision.
Kaemmer on iRacing's philosophy:
We actually see our new company as being in the racing and driving business, more than the game business. We are putting together a global Web site that will be a central place for anyone interested in racing and driving--from beginners, who need some initial instruction in a racing school, up to professional race drivers who would like the opportunity to get track time at a low cost. In addition to providing a simulator and training, we will be sanctioning online race series at all levels--from 140 hp Formula Fords up to 800 hp champ cars, with everything in between--and in many types of cars, including formula, sports car, stock car, even off-road cars. Racing is a very expensive sport, so not many people get a chance to participate. We would like to change that, to allow more people to really learn about racing and to experience some of the thrill.
2009: SimBin's Xbox 360 exclusive release is the developers' first foray into console gaming, led in part to lack-luster sales of PC-based realistic racing simulators. The game will use an untested Lizard game engine that is graphically more advanced over the Gmotor engine previously used in previous titles. It is slated for a February 17th 2009 release.
Sim (simulated) racing is the collective term for computer software (i.e. a vehicle simulation game) that attempts to simulate accurately auto racing (a racing game), complete with real-world variables such as fuel usage, damage, tire wear and grip, and suspension settings. To be competitive in sim racing, a driver must understand all aspects of car handling that make real-world racing so difficult, such as threshold braking, how to maintain control of a car as the tires lose traction, and how properly to enter and exit a turn without sacrificing speed. It is this level of difficulty that distinguishes sim racing from "arcade" driving games where real-world variables are taken out of the equation and the principle objective is to create a sense of speed as opposed to a sense of realism.
Copyright of the above as well as most of the descriptions in this list are Wikipedia.org as well as a GameSpot special on the History of Papyrus.