Development started shortly after Kao the Kangaroo: Round 2 was re-released on Steam in 2019 following a "#BringBackKao" campaign on social media. Tate Multimedia was surprised by the game's sales on the platform, which led to them deciding to create a new installment. Many ideas were considered (such as a remake of the third game, Kao the Kangaroo: Mystery of the Volcano, and a combat-focused title starring a much older Kao), but the team eventually decided to make the new game a reboot, with publishing head Kaja Borówko saying it was "a completely different take on the story and on the character."