In 1999, Bungie sold 19.9% of their shares to Take-Two Interactive. In June 2000, Bungie was purchased outright by Microsoft, with Take-Two acquiring the Oni and Myth intellectual properties. Myth III: The Wolf Age was announced by Take-Two subsidiary GOD Games in January 2001, when they revealed MumboJumbo were developing the game for Windows and Mac OS. The Wolf Age would be MumboJumbo's first game.
Addressing the issue of remaining faithful to the two previous games whilst still introducing new elements to the franchise, MumboJumbo president Mark Dochtermann explained the developers did not intend to reinvent the series' basic gameplay, although they were keen to try out new things; "There's a lot left to explore in the Myth franchise even before we go in a somewhat different route. Although, we are taking a [new] route in terms of adding 3D acceleration, 3D models, and doing stuff with the terrain engine and physics that are still way beyond what the other RTS games are doing right now." Similarly, producer and lead designer Scott Campbell stated "We intend to pay respect to Myth and its fans. We don't care to change the whole appeal of the game just so we can call it ours." With this in mind, MumboJumbo hired three members of Soulblighter's modding community to work on the game. Although initially hired to work on technical aspects, they became invaluable to MumboJumbo in terms of writing the storyline. Executive producer Mike Donges explains, "they're our Myth lore experts, so if we try to put in something new, they have the ability to [reject it]."
Although The Wolf Age was built using Soulblighter's source code, the developers made significant changes, the single biggest of which was that everything in The Wolf Age is rendered in OpenGL 3D, including the characters and all environmental objects. The Wolf Age was the first Myth game to feature fully 3D characters, rather than 2D sprites in a 3D environment. Of the move to full 3D, Dochtermann points out that the 3D engine allows for things not possible in the previous games; "There's some very cool kinematics stuff. So when you have explosions, and when your units move through the world, the trees will respond. And not just blowing them up. You'll see the shock waves from explosions, and you're affecting the environment a lot more. It's a lot more realistic." The new game engine also supported real-time shadows and dynamic lighting, as well as being capable of blending six to seven different texture layers, depending on how close the camera is to the action.
Regarding the programming tools used to create the game, MumboJumbo initially began by using Bungie's "Fear" and "Loathing". However, they never intended to use them for very long, with the plan always being to develop their own tool. Speaking a few months into development, Campbell stated, "we are planning on doing a merger of the tools later on [...] we're actually making tools right now that we will be using for Myth III that are not only cross-platform compatible, but will also allow you to do all the neat new things, use all the new scripting commands and the new models and 3D units and stuff that we're using in this game." The new tool was eventually called "Vengeance". At the E3 event in May 2001, MumboJumbo promised that Vengeance would ship with the game.
The Wolf Age went gold on October 17, 2001, completing a development cycle of only ten months, an relatively fast time to develop a major video game. Soon before the game's release, PC Gamer's Jim Preston wrote he was skeptical as to whether the developer had been given enough time to satisfactorily complete the game.
On November 16, lead programmer Andrew Meggs posted on Mythvillage.org that the entire Myth III PC team had been laid off by MumboJumbo the same day the game had been released, November 2. In a post titled "Some ugly, but honest truths", Meggs wrote
The basic reason was that there was no next project lined up and funded, nor was there expected to be in the near future, it's expensive to keep a team of salaried people around doing nothing, and MumboJumbo was not a huge business with infinitely deep pockets. There's a tangled web between the MumboJumbo Irvine project team, its parent company United Developers and the game's publisher Take-Two. I wouldn't blame anyone specifically for the collapse - call it everybody's fault if you're the angry sort or nobody's fault if you're charitable.
Meggs explained the team knew there were problems with the Windows version of the game that needed addressing, but, as they had been fired, they were unable to do so. He stated they had been working on a patch to fix many of these problems when they were let go, and he was unsure if this patch would be released. He also acknowledged that many of the criticisms regarding bugs in the game would have been addressed by the patch. The same day Meggs made his post, November 16, MumboJumbo closed their offices in Irvine, California, with a view to consolidate their resources in their Dallas headquarters.
On November 19, MumboJumbo denied the Myth III team had been laid off, saying all staff members had been invited to work in the Dallas office. They also announced the patch Meggs had spoken of would be released within the week. On December 19, Mark Dochtermann promised the patch would be released before Christmas, along with Vengeance, which had not been shipped with the game. The patch was never officially released by MumboJumbo.