New Empire

Malgus' disillusionment with his comrades grew steadily, starting from the signing of the Treaty of Coruscant and Emperor's choice not to obliterate the Republic entirely at the conclusion of the Great Galactic War. As the unstable peace of the Cold War era unfolded between the Republic and the Sith Empire, Malgus' contempt for the Sith Empire's political machinations and the treachery of its governing Dark Council intensified.

Driven by a desire to correct what he perceived as the Empire's shortcomings, Malgus made the decision to secede and establish his own sovereign state. His envisioned 'true' empire would cleanse the galaxy through relentless conflict. Convinced that many shared his sentiments regarding the Empire's condition, Malgus extended an invitation to all members of the existing Empire to join his cause. In a relatively short period, Malgus amassed a devoted army comprising droids, mercenaries, soldiers, and Sith from diverse species. With this nascent rebellion, Malgus intended to secure minor victories to gauge its capabilities, while awaiting the opportune moment to launch an assault on the galaxy and vanquish both the Republic and the Empire. Over time, Malgus forged numerous alliances with influential Alien factions, notably the Schism Collective. In return for Malgus's offerings, the Collective resolved to reciprocate by providing his Sith Empire with significant scientific advancements, such as integrating technology from the ancient Foundry into the Emperor's captured space station. Furthermore, they enhanced the weaponry of Malgus's forces with Rakata technology and perfected the production of Malgus's stealth fleet.

Malgus steered his emergent empire toward a series of initial triumphs, seizing control of numerous territories within the Unknown Regions. The most significant opportunity for the budding empire arose when rumors circulated that the Sith Emperor had met his end at the hands of a Jedi Knight. While unbeknownst to most, it was merely the Emperor's Voice that had been eliminated, this presented Malgus with the optimal chance to consolidate the Sith under his command. Several other Sith, awaiting the opportune moment, also aligned themselves with him, deserting the Empire amidst the alleged demise of the Sith Emperor. Malgus secured the loyalty of Darth Serevin, who rose to become one of his most trusted confidants. Malgus garnered a substantial following of loyal Sith, mercenaries, and droids, as many believed the Sith Empire was crumbling and in a state of disarray. At Ilum, Malgus proclaimed himself the Emperor of his newly formed faction, vowing to crush both the Republic and the Sith who remained disloyal to him. This declaration turned the Galactic Republic, the Jedi Order, the Sith Empire, and the Sith Emperor himself into his adversaries.

The forces loyal to Malgus found themselves under attack by both Republic and Sith forces at Ilum, resulting in the death of Malgus's ally Darth Serevin. These forces stormed both Ilum and Malgus's flagship, completely obliterating Malgus's fledgling empire. As Malgus's forces disintegrated against the combined might of the Republic and Sith, Malgus's hopes began to fade; the battles turned into resounding victories for the Republic and Empire. The commanders breached Malgus's flagship and, after overcoming Sith, mercenaries, and droids, including the newly programmed and modified HK-47, confronted and defeated Malgus in his throne room. Consequently, the New Empire was extinguished before it could truly take root.

Despite the failure of Malgus's Empire, it left a significant imprint on the old Empire. The internal strife caused by the conflict severely weakened the Imperial military, compelling them to seek a new energy source on the planet Makeb. Furthermore, officers and enlisted personnel gradually became more receptive to the inclusion of aliens within their ranks.

The New Empire's army mirrored that of its counterpart, the Sith Empire, featuring its own Imperial Guard, its own troopers, and PX-74 Artillery Droids. However, these forces were further augmented following its emergence during the Battle of Ilum with outcast Sith and a multitude of aliens who joined its ranks, bolstering the army rapidly in preparation for confrontations with both the Galactic Republic and the Sith Empire.

The navy comprised vessels that were part of Operation Dark Ice, which involved the creation of a stealth fleet utilizing Ilum's crystals to power cloaking devices. With the assistance of the Schism Collective, a group of Anomid geniuses, they successfully completed the construction of the stealth fleet, also known as the Crystal Fleet, and equipped the Emperor's Fortress with flux cannons. This combination rendered the New Empire virtually unstoppable in space warfare, enabling it to contend with both Republic and Imperial Fleets deployed against it.