The origins of the Kobold can be traced back to 3062, when the infantry of the Free Rasalhague Republic's Second Kavalleri sought to outfit themselves with Kage BattleArmor. However, with tensions rising on all fronts, the Draconis Combine was unwilling to fulfill the Republic's request. Undeterred, Överste Jack Koslow continued to lobby his commanders until given approval to approach the SLDF and ComStar with a proposition. The Republic would supply raw materials, while ComStar and the SLDF would provide the technological know-how towards a BattleArmor project that would be funded equally by all three. Research and development was started on Grumium, where construction of a prototype manufacturing line was rushed to completion. After the Jihad started, Grumium rushed the Kobold into full production and they soon became common on the fields of battle.

         Originally started with the aim of copying the Kage's abilities, the development team soon proposed several changes, resulting in a completely new design useful both for reconnaissance operations and in frontline combat. Though sacrificing some mobility, the Kobold boasts the Kage's stealth capabilities and can carry one integral anti-'Mech weapon, most often a laser or grenade launcher. In addition, Kobold squads also sometimes employ a heavier pulse laser or TAG for operations alongside friendly Arrow IV artillery units or other elements equipped with the rare Marik-manufactured semi-guided LRMs. In standard practice, the squad leader carries this squad support weapon slung under the suit's left arm, leaving the powerful battle claw free.

         Used and built by the Rasalhague Dominion and ComStar, and by extension used in the New SLDF, the Kobold is a superior scout. It also has proven excellent at guiding in homing weapons, and is therefore deployed with most fixed fortifications and many mobile artillery and support units.