Demon's Souls and possibly the rest of the Soul's game series almost did not come to be, as there were problems with building an ideal prototype for the game. According to Hidetaka Miyazaki, "Demon's Souls wasn't doing well [...] The project had problems and the team had been unable to create a compelling prototype. But when I heard it was a fantasy-action role-playing game, I was excited. I figured if I could find a way to take control of the game, I could turn it into anything I wanted. Best of all, if my ideas failed, nobody would care "it was already a failure." Miyazaki was eventually assigned to the game after initially working on the Armored Core series and reportedly "changed everything about it."

The initial launch of the game was not favorable, as it only sold 20,000 copies in the first week, far fewer than Sony had hoped. However, good word of the game began to spread rapidly and within a few months, the game had sold over 100,000 copies in Japan, which then prompted a Western release of the game, garnering another 150,000 sales in the first month.