The newly founded subsidiary was co-located with Playmates Toys’ US branch office in La Mirada, California and they immediately started to search for a developer to hire to create a video game based on a new intellectual property. Playmates Toys created a subsidiary known as Playmates Interactive Entertainment Inc. Inspired by the recent success of Sega’s Sonic the Hedgehog franchise Playmates Toys felt that the video game medium was the best way to introduce a new franchise to their demographic. Playmates Toys wanted to recreate the success they had using the Teenage Mutant Ninja Turtles license but with their own licenses allowing them to capitalize on all aspects of a successful franchise such as cartoons, video games, action figures, merchandise, etc. In 1989, Playmate Toys created and distributed Teenage Mutant Ninja Turtles action figures, which became massively successful for the company.

The conception of the game began when Playmates Toys wanted to start their own franchise based off the success, they had with the Teenage Mutant Ninja Turtles license. The development studio used the Sega Genesis as the lead platform for the development of the game with all other ports stemming from the Genesis version. Earthworm Jim is an action platforming video game developed by Shiny Entertainment and published by Playmates Interactive Entertainment for the Sega Genesis / Mega Drive home console.

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