Developed in conjunction with Redux: Dark Matters and The Ghost Blade, Neo XYX originated as a GameMaker prototype inspired by Toaplan shoot 'em ups titled XYX that was distributed for PC in 2012 by designer Perry "Gryzor/Rozyrg" Sessions, who had previously helped with development of Gunlord before NG:Dev.Team became involved after the project caught their interest and worked alongside Sessions, suggesting him to refine aspects of his project into a Neo Geo game.

Neo XYX is a science fiction-themed vertically scrolling shoot 'em up game reminiscent of Toaplan and Cave shooters such as Batsugun and DoDonPachi respectively, in which the player take control of a space fighter craft through six increasingly difficult stages in order to defeat an assortment of enemy forces and bosses.

[1][2][8] The player can also slowdown the ship's movement to avoid incoming bullets more precisely by pressing the C or R button in the Neo Geo and Dreamcast versions respectively.

[12][13] Designer Perry "Gryzor/Rozyrg" Sessions, who had previously helped with development of Gunlord at NG:Dev.Team with René Hellwig, acted as art director and graphic artist.

[13] When composing the soundtrack for Neo XYX, Rafael Dyll stated that NG:Dev.Team wanted him produce music that were short and looped without noticeable breaks, creating something fresh but based on retro sounds, using instruments akin to arcade games from late 1980s or 16-bit consoles such as Sega Mega Drive.

[23] The Dreamcast version of Neo XYX was then slated for a holiday 2013 launch but remained in development due to internal issues until it went gold in January 2014.

[1] Jeuxvideo.com's Dominique Cavallo commended the fast-paced action, learning curve, display options and graphical effects but criticized its lack of innovation, short length and omission of a multiplayer mode.

[2] Heiko Poppen of German website neXGam commented in a positive light about the scoring system, varied and colorful graphical design of levels and bosses, Dyll's music and learning curve but criticized the Dreamcast version for being sparse with option settings, lack of two-player mode and other aspects.

[32] David Borrachero of Spanish magazine RetroManiac compared the game with shooters such as Truxton and Raiden, praising the Japanese-style aesthetic, performance, sound design, gameplay and controls but noted that its high difficulty level was not recommended for newcomers, the lack of a two-player mode and technical bugs.