A 35kb prototype version of the game was created by Robert Jaeger based on the concept given to him by his friend Mark Sunshine. Robert Jaeger began making the game at the age of 15. The game was unveiled at the Consumer Electronics Show in 1983. The game was bought by Parker Brothers. Parker Brothers decided to release Montezuma's Revenge
in 1984, but the game was adapted to the version that required only 16kb of RAM by removing some game elements. Parker Brothers made some cuts to the graphics, removed the intro, simplified maze construction, and changed the name of the main character from Pedro to Panama Joe.