According to producer Hideo Yoshizawa, Mr. Driller was first pitched by director Yasuhito Nagaoka as Dig Dug 3, starring Dig Dug instead of Mr. Driller, and to be released for consoles. Compared to the final game, it was originally designed to be slower-paced and was inspired by the Japanese children's game Yamakuzushi (山崩し). Yamakuzushi is played by pushing a stick into the middle of a small sand mountain, and one at a time, each player removes some sand from the mountain until the losing player knocks down the stick. He conceived the idea for what would become Mr. Driller by imagining if a person was in the middle of the sand mountain instead of a stick and how scary the situation would be. He had completed the basic game before pitching it, and upon seeing it, Yoshizawa suggested that it be released in arcades instead of consoles, as he felt it was a more viable market for the game. Later design changes were made separating it from the Dig Dug series at the time, and the initial batch of 3,000 cabinets produced by Namco sold out.