After Night Trap proved to be a highly controversial title, designer Rob Fulop wanted to counteract the game's bad press (partially in a tongue-in-cheek way) by making the "cutest" and most "sissy" game imaginable. After consulting with a mall Santa Claus impersonator about what children wanted most for Christmas, he conceived the concept of Dogz: Your Virtual Pets, which would later evolve into the Petz series after Mindscape and later Ubisoft acquired the publishing rights to several games in the series.

The ball-based graphics of Dogz: Your Virtual Petz were taken from Ballz 3D.