[4] The project derived from Daydream's worry, according to the team's Nigel Papworth, that the production pipeline used by its titles Safecracker and Traitors Gate was "too costly and time consuming to be a viable long term solution" for the company.

[5] In designing Clusterball, the team sought to create a unique online multiplayer game without violence, as Daydream did not release violent titles.

[5] The company told investors in June 1997 that "feasibility study and research" was underway for a game codenamed Project 3,[6] later revealed as Clusterball.

[6] They settled on a combination of sports and flight simulator gameplay,[2][5] with elements of racing and inspiration from the game Diamond Mine.

The design was also driven by a desire among certain Daydream employees for "a game where you could fly around in a landscape and see very far" into the distance, according to the team's Matti Larsson.