"Sonic Rivals" was developed as a collaborative effort between Sega and Backbone Entertainment for the PlayStation Portable (PSP). The game's concept originated from a traditional platform game Backbone designed. Takashi Iizuka became involved with the game, and he changed its direction to a racing game. The majority of development was handled by Backbone with assistance from Sega Studio USA, although some aspects, such as the story, were done by Sega. The developers chose to create the game on the PSP over the Nintendo DS, due to its stronger processing power and higher graphical quality.