Guinness World Records recognizes Nihon Falcom's Dragon Slayer, released in 1984, as the first true action RPG. However, Allgame listed the following games released prior to 1984 as action RPGs: Temple of Apshai (1979) and its sequel Gateway to Apshai (1983), Beneath the Pyramids for the Apple II (1980), Bokosuka Wars (1983), and Sword of Fargoal (1983). Jeremy Parish of USgamer claimed that Adventure (1980) was an action RPG. Bill Loguidice and Matt Barton claimed that the Intellivision games Advanced Dungeons & Dragons (1982) and Treasure of Tarmin (1983) were action RPGs. Shaun Musgrave of TouchArcade notes that Adventure lacked RPG mechanics such as experience points and permanent character growth, and argues that Gateway to Apshai is "the earliest game I'd feel comfortable calling an action-RPG" but notes that "it doesn't fit neatly into our modern genre classifications," though came closer than Bokosuka Wars released the same year.
Jeremy Parish of 1UP.com argues that Japanese developers created a new brand of action role-playing game; these new Japanese games combined the role-playing genre with arcade-style action and action-adventure elements. Shaun Musgrave of TouchArcade also traces the genre's roots to Japan, noting that the "Western game industry of the time had a tendency to treat action games and RPGs as separate things for separate demographics".
Jeremy Parish argues that action RPGs were popularized in Japan by The Tower of Druaga. It was released for arcades in June 1984, and was intended as a "fantasy version of Pac-Man, with puzzles to solve, monsters to battle, and hidden treasure to find". Its success in Japan inspired the development of Dragon Slayer (1984) and Hydlide (1984). Dragon Slayer, Hydlide and Courageous Perseus (1984) "vie for position as genre precedent" according to John Szczepaniak, and there was an ongoing rivalry developing between the Dragon Slayer and Hydlide series over the years. The Tower of Druaga, Dragon Slayer and Hydlide were influential in Japan, where they influenced later action RPGs such as Ys, as well as The Legend of Zelda.:38
Falcom's Dragon Slayer, created by Yoshio Kiya, is "the very first action-RPG ever made" according to GameSetWatch, and is recognized as the first true action RPG by Guinness World Records. Originally released for the PC-8801 computer in September 1984, it abandoned the command-based battles of earlier role-playing games in favor of real-time hack-and-slash combat that required direct input from the player, alongside puzzle-solving elements. In contrast to earlier turn-based roguelikes, Dragon Slayer was a dungeon-crawl role-playing game using real-time, action-oriented combat, combined with traditional role-playing mechanics. Dragon Slayer's overhead action role-playing formula was used in many later games.
Screenshot of the original NEC PC-8801
version of Hydlide
(1984), an action role-playing game
T&E Soft's Hydlide, released in December 1984, was created by Tokihiro Naito, who was influenced by The Tower of Druaga.:42–49 It was the first action RPG with an overworld. The game was immensely popular in Japan, selling 2 million copies across all platforms. According to John Szczepaniak, it "cannot be overstated how influential Hydlide was on the ARPGs which followed it". The same year, Courageous Perseus was also one of the earliest action RPGs.
Dragon Slayer II: Xanadu, released in 1985 (billed as a "new type of real-time role-playing game"), was an action role-playing game including many character stats and a large quest. It also incorporated a side-scrolling view during exploration and an overhead view during battle, and an early "Karma" morality system where the character's Karma meter will rise if he commits sin (killing "good" enemies), which in turn causes the temples to refuse to level him up. Xanadu Scenario II, released in 1986, was an expansion pack, created to expand the content of Dragon Slayer II: Xanadu. Hydlide II: Shine of Darkness (1985) also featured a morality system. Eurogamer cites Fairlight (1985) as an early action RPG.
An important influence on the action RPG genre was the 1986 action-adventure, The Legend of Zelda, which served as the template for many future action RPGs. In contrast to previous action RPGs, such as Dragon Slayer and Hydlide, which required the player to bump into enemies in order to attack them, The Legend of Zelda featured an attack button that animates a sword swing or projectile attack on the screen. It was also an early example of open-world, nonlinear gameplay, and introduced new features such as battery backup saving. These elements have been used in many action RPGs since.
In 1987, Zelda II: The Adventure of Link implemented a more traditional RPG-esque system, including experience points and levels with action game elements. Unlike its predecessor, Zelda II more closely fits the definition of an action RPG.
Another Metroidvania-style action RPG released that year was System Sacom's Sharp X1 computer game Euphory, which was possibly the only Metroidvania-style multiplayer action RPG produced, allowing two-player cooperative gameplay. The fifth Dragon Slayer title, Sorcerian, was also released that year. It was a party-based action RPG, with the player controlling a party of four characters at the same time in a side-scrolling view. The game also featured character creation, highly customizable characters, class-based puzzles, and a new scenario system, allowing players to choose from 15 scenarios, or quests, to play through in the order of their choice. It was also an episodic video game, with expansion disks later released offering more scenarios. Falcom also released the first installment of its Ys series in 1987. While not very popular in the West, the long-running Ys series has performed strongly in the Japanese market, with many sequels, remakes and ports in the decades that followed its release. Besides Falcom's own Dragon Slayer series, Ys was also influenced by Hydlide, from which it borrowed certain mechanics such as health-regeneration.
The Faery Tale Adventure offered one of the largest worlds at the time, with over 17,000 computer screens without loading times.
In 1988, Telenet Japan's Exile series debuted, and was controversial due to its plot, which revolves around a time-traveling Crusades-era Syrian assassin who assassinates various religious/historical figures as well as 20th century political leaders, The gameplay of Exile included both overhead exploration and side-scrolling combat, and featured a heart monitor to represent the player's Attack Power and Armor Class statistics. Another controversial aspect of the game involved taking drugs (instead of potions) that increase/decrease attributes, but with side effects such as heart-rate increase/decrease or death. Origin Systems, the developer of the Ultima series, also released an action RPG in 1988, titled Times of Lore, which was inspired by various NES titles, particularly The Legend of Zelda.:182, 212 Times of Lore inspired several later titles by Origin Systems, such as the 1990 games Bad Blood (another action RPG based on the same engine):183 and Ultima VI: The False Prophet, based on the same interface.:83–84
Also in 1989, the enhanced remake Ys I & II was one of the first video games to use CD-ROM, which was utilized to provide enhanced graphics, animated cut scenes, a Red Book CD soundtrack, and voice acting. Its English localization was also one of the first to use voice dubbing. The game received the Game of the Year award from OMNI Magazine in 1990, as well as other prizes. Another 1989 release, Activision's Prophecy: The Fall of Trinadon, attempted to introduce "Nintendo-style" action combat to North American computer role-playing games.
In 1991, Square released Seiken Densetsu: Final Fantasy Gaiden, also known as Final Fantasy Adventure or Mystic Quest in the West, for the Game Boy. Like Crystalis, the action in Seiken Densetsu bore a strong resemblance to that of Legend of Zelda, but added more RPG elements. It was one of the first action RPGs to allow players to kill townspeople, though later Mana games removed this feature. Arcus Odyssey by Wolf Team (now Namco Tales Studio) was an action RPG that featured an isometric perspective and co-operative multiplayer gameplay.
In 1993, the second Seiken Densetsu game, Secret of Mana, received considerable acclaim, for its innovative pausable real-time action battle system, and its innovative cooperative multiplayer gameplay, where the second or third players could drop in and out of the game at any time, rather than players having to join the game at the same time. The game has remained influential through to the present day, with its ring menu system still used in modern games and its cooperative multiplayer mentioned as an influence on games such as Dungeon Siege III (2011).
Most other such games, however, used a side-scrolling perspective typical of beat 'em ups, such as the Princess Crown series, including Odin Sphere and Muramasa: The Demon Blade.
LandStalker's 1997 spiritual successor Alundra is considered "one of the finest examples of action/RPG gaming", combining platforming elements and challenging puzzles with an innovative storyline revolving around entering people's dreams and dealing with mature themes.