Early history (2004-2007)

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Work commenced on the project in 2004, and the team settled on a name in the summer of 2005. The developers used the previous project Penguin Chat 2 – which was still online – as a jumping off point in the design process, while incorporating concepts and ideas from Experimental Penguins. Penguin Chat's third version was released in April 2005, and was used to test the client and servers of Penguin Chat 4 (renamed Club Penguin). Variants of Penguin Chat 3 included Crab Chat, Chibi Friends Chat, Goat Chat, Ultra-Chat, and TV Chat. Users from Penguin Chat were invited to beta test Club Penguin. The original plan was to release Club Penguin in 2010, but since the team had decided to fast-track the project, the first version of Club Penguin went live on October 24, 2005, just after Penguin Chat servers were shut down in August 2005. While Penguin Chat used ElectroServer, Club Penguin would use SmartFoxServer. The developers financed their start-up entirely with their own credit cards and personal lines of credit, and maintained 100 percent ownership.Club Penguin started with 15,000 users, and by March that number had reached 1.4 million—a figure which almost doubled by September, when it hit 2.6 million. By the time Club Penguin was two years old, it had reached 3.9 million users, despite lacking a marketing budget. The first mention of the game in The New York Times was in October 2006. The following year, Club Penguin spokesperson Karen Mason explained: "We offer children the training wheels for the kinds of activities they might pursue as they get older."

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