Kotaku was first launched in October 2004 with Matthew Gallant as its lead writer, with an intended target audience of young men. About a month later, Brian Crecente was brought in to try to save the failing site. Since then, the site has launched several country-specific sites for Australia, Japan, Brazil and the UK. Previous contributors to the site include Luke Smith. Crecente was named one of the 20 most influential people in the video game industry over the past 20 years by GamePro in 2009 and one of gaming's Top 50 journalists by Edge in 2006. The site has made CNET's "Blog 100" list and was ranked 50th on PC Magazine's "Top 100 Classic Web Sites" list. Its name comes from the Japanese otaku (obsessive fan) and the prefix "ko-" (small in size).
In 2007, attorney Jack Thompson sued Gawker Media and site editor Brian Crecente over concerns that Kotaku declined to remove threatening user comments, but the lawsuit was dismissed the next day. In 2009, Business Insider reported that Hearst Corporation sought to buy Kotaku from Gawker Media. In 2010, Kotaku criticized a Japanese magazine's glowing endorsement of a Konami game as a conflict of interest; Konami subsequently revoked Kotaku's invitation to the game's launch party. In 2013, Forbes criticized Kotaku over what they called an inflammatory headline in a story about Hideki Kamiya; Kotaku rewrote the headline.
In 2007, Kotaku ran a story about rumored upcoming features on the PlayStation 3, and Sony responded by temporarily blacklisting the website. The site claimed in 2015 that they had been blacklisted by major game companies Bethesda Softworks and Ubisoft.