During an interview with Forbes in 2016, producer Toshimichi Mori revealed that he had an interest in the Rooster Teeth webseries RWBY, and even expressed interest in making a game based on it, saying:


Prior to EVO 2017, Rooster Teeth teased the possibility of a RWBY fighting game being announced there on their Twitter account. This game would end up being BlazBlue: Cross Tag Battle, which was announced after the BlazBlue: Central Fiction championships, where series protagonist Ruby Rose was one of the first four characters announced for the game.

Prior to release, Arc System Works announced that the game would feature twenty characters as paid DLC for the game's first season, meaning that the game would launch with only half of its planned roster. This prompted backlash from fans, who pointed out that the game reused assets from past fighting games and that half of Team RWBY would be sold separately while the other half was in the base game. In response, Toshimichi Mori announced that the remaining Team RWBY members (Blake Belladonna and Yang Xiao Long) would be free of charge, and that the costs for the characters would not exceed that of the game's base retail cost.