Following the release of Bugdom on Mac OS, developer Pangea Software licensed the game's publishing rights to Gathering of Developers. Gathering of Developers was later acquired by Take-Two Interactive, who continued to sell copies of the game under their Global Star label despite having let their license expire. In response, publisher Ideas From the Deep, which acquired the PC rights to the game and re-ported it in 2003, reported this to the crime division of the U.S. Federal Bureau of Investigation (FBI). While the FBI acknowledged the complaint, seemingly nothing came out of it, and Take-Two continued to distribute copies of the game.

According to programmer Brian Greenstone, the idea of the game being about bugs was likely inspired by an earlier SNES game he worked on titled Harley's Humongous Adventure.