Data East wanted to make a puzzle game due to their casual nature and came across during their research with Moscow Nights (1993), a collection of puzzle games from Russia published by Black Legend for MS-DOS and among them they liked a title programmed by Russ called Drop-Drop (1992), which they found uninteresting to play but enjoyed its basic core mechanic and started thinking ways to make it more interesting.

The game proved popular among players due to its design and characters, but both the original arcade release and console versions garnered average reception from critics, some of which reviewed it as an import title.

Magical Drop is a puzzle game where the player takes control of one of six characters named after a tarot card, battling against computer-controlled opponents before facing the goddess World in a final encounter.

Magical Drop was developed by Data East, known for arcade games like Karnov, Bad Dudes Vs. Dragon Ninja, Atomic Runner Chelnov, and Windjammers.

[8][9] The soundtrack was scored by Gamadelic member Hiroaki "Maro" Yoshida, known for his work in Data East titles such as Kūga – Operation Code Vapor Trail and Fighter's History.

[6][12] According to Takashi Kobayashi (then-development section manager at Data East), the game was "amateurish" and uninteresting to play, featuring blocks composed of random objects and lacking a combo system.

[12] Data East chose Drop-Drop and signed a contract with Russ to start production of their own version, serving as basis for Magical Drop.

[1][16] On November 17, an album containing music from the game and Dunk Dream '95 was co-published in Japan by Scitron and Pony Canyon, featuring arranged songs composed by Hiroaki Yoshida and other Gamadelic members.

[41] According to the 2016 book, Perfect Guide of Nostalgic Super Famicom, the title succeeded in attracting female players due to its pop design and cute characters.

[34] Mean Machines Sega's Marcus Hearn and Steve Merrett also reviewed the Saturn port, remarking that the game is addictive and offers numerous options but frustratingly difficult in single-player mode.

update in the PlayStation release of Magical Drop III, Mega Fun's Ralph Karels found it to be an entertaining title, citing its high addictive factor.

[43] Peter Willington of Pocket Gamer reviewed the PlayStation Network re-release on PSP, calling it "excellent" but was critical of the overall audiovisual presentation, and noted the lack of English translation and its difficulty.

[45] Hardcore Gamer's Chris Shive regarded the game and Magical Drop II as the most enjoyable titles in the Data East Classic Collection for Super Nintendo.

[48][49] UTV Ignition Entertainment published a follow-up, Magical Drop V, developed by Golgoth Studio and released in 2012 for PC, featuring characters and their gameplay mechanics from the cancelled Neo Geo game Ghostlop.

[4][6][50] Another follow-up, Magical Drop VI, was announced to be in development by Highball Games and Storm Trident for Nintendo Switch in 2022 by publisher Forever Entertainment.