In July 1986, XTALSOFT was among six other companies to form the Disk Original Group, a collective publishing house for Famicom Disk System games headed by Square Co., Ltd. For their part, XTALSOFT developed Sword of Kalin under the Disk Original Group.
At the dawn of the 90s, XTALSOFT was experiencing management difficulties, and on October 1, 1990 they combined with T&E Soft to form T&E Soft's Osaka development department.
XTALSOFT's name is a blend of "crystal software," where "crystal" is abbreviated with the letter X, a common jargon abbreviation in written English. Originally, their name was written with an apostrophe as "X'TAL SOFT."