A new installment in the "Grandia" series developed by Game Arts was officially announced on June 1, 2001 with the tentative name of "Grandia X". The game, later retitled "Grandia Xtreme", was to be published by Enix as they had just invested capital in Game Arts for a total of ¥99.2 million, or 15% of the company. The game was the first title Game Arts developed exclusively for the PlayStation 2. While previous installments in the series were traditional role-playing video games, the developers took the new title in a different direction and designed it more as an action role-playing game or dungeon crawler to make it more accessible to casual gamers. They nevertheless kept and enhanced mainstays such as the combat and magic systems, as well as the "enchantment" aspect of the story. To design the characters of the game, Enix and Game Arts selected Kamui Fujiwara, the character designer of "Terranigma". Development for the game spanned roughly 18 months.