Lost Odyssey's story is penned by the award-winning Japanese novelist, Kiyoshi Shigematsu who worked directly with the game's producer Hironobu Sakaguchi on the tales from Kaim's past that will be strewn throughout the game. Heading up the artistic demands of the title is famed Japanese mangaka, Takehiko Inoue, while famed composer Nobuo Uematsu has been recruited to create a more contemporary soundtrack. Mistwalker is developing the title, with cooperation with a studio named Feel Plus, a subsidiary of Microsoft created specifically to aid Mistwalker. Feel Plus is made up of around 40 former Nautilus/Sacnoth developers, most famous for the cult favorite Shadow Hearts RPG series. (Sacnoth was officially announced as being dissolved in 2007.) Former Square employees at Microsoft are also involved. The game ships on four dual layer DVDs, more than any Xbox 360 game to date.
A playable demo of the game was shown at the Tokyo Game Show 2006, and was made available with the November issue of Weekly Famitsu.
On July 11, 2007, an English trailer of Lost Odyssey was shown at E3 2007.
According to Peter Moore and Microsoft's E3 press event Lost Odyssey was to be in stores worldwide for the 2007 holiday season, although it was actually released in February 2008 in both the US and Europe.
On November 19, 2007, at a special Blue Dragon/Lost Odyssey concert held in Shibuya, Tokyo, it was announced that the game had gone gold and was ready for its Japanese release date of December 6, 2007. According to a special bloggers event in where selected people are invited to play demos of the game from the very beginning, English/Japanese voices are selectable in the Japanese version. However, English support display is not available.
An issue regarding the packaging has led to several complaints from consumers. Since the game could not fit onto a standard DVD, it requires four discs. In Japan and Australia, the solution was to use an oversized case with two disc trays to store the discs. In the United States and PAL territories, however, the first three discs were crammed onto a single 3-disc spindle inside the main game case. The fourth disc came packaged only in a paper sleeve. The concern is that the method used for the American and European versions could result in scratched discs.