Video Games Encyclopedia

In late 1987, FTL Games released Dungeon Master, a dungeon crawler that had a real-time game world and some real-time combat elements (akin to Active Time Battle), required players to quickly issue orders to the characters, and set the standard for first-person computer RPGs for several years.  It inspired many other developers to make real-time dungeon crawlers, such as Eye of the Beholder and Lands of Lore: The Throne of Chaos. Dungeons of Daggorath meanwhile for the TRS-80 Color Computer had first employed real-time combat in 1982.

Ultima Underworld: The Stygian Abyss, released in 1992, has been cited as the first RPG to feature first-person action in a 3D environment. Ultima Underworld is considered the first example of an immersive sim, a genre that combines elements from other genres to create a game with strong player agency and emergent gameplay, and has influenced many games since its release. The engine was re-used and enhanced for Ultima Underworld’s 1993 sequel, Ultima Underworld II: Labyrinth of Worlds. Looking Glass Studios planned to create a third Ultima Underworld, but Origin rejected their pitches. After Electronic Arts (EA) rejected Arkane Studios’ pitch for Ultima Underworld III, the studio instead created a spiritual successor: Arx Fatalis. Toby Gard stated that, when he designed Tomb Raider, he “was a big fan of … Ultima Underworld and I wanted to mix that type of game with the sort of polygon characters that were just showcased in Virtua Fighter”. Ultima Underworld was also the basis for Looking Glass Technologies’ later System Shock.

Reference: Wikipedia