Moonshell Island started out as a game mock-up created by Crabby Sam in mid 2018 as her contribution for Squared Up! A Pixel Art Zine, which was a successful campaign to raise charity for Able Gamers.
By January 2019, Crabby Sam began collaborating with Schotti to launch a project under the working title CrabbyRPG. On August 10, 2019, CrabbyRPG was named Moonshell Island.
In August 2020, Anna Eichenauer joined the project to compose the Moonshell Island soundtrack after capturing the sound that best fit the game with a series of musical sketches.
Funded in part by the Massive Sacks of Cash grant in January 2020, the first playable prototype for Moonshell Island was made available to Cheekynauts supporters on Patreon in November.
After a year of planning the Moonshell Island project in 2021, the collaboration between Crabby Sam and Schotti was dissolved in early 2022 due to a mutual lack of availability for both projects. Crabby Sam continued building the project toward the goal of obtaining production funding.
In July 2022, Crabby Sam was accepted into the Baby Ghosts concept grant and peer accelerator program by Weird Ghosts and Gamma Space, to develop the studio and a pitch demo to engage future stakeholders with.