The director for Hobo with a Shotgun, Jason Eisener, became the game's informal advisor after befriending the game's director, Dean Evans. The game was inspired by movies from the 1980s such as The Wraith and Terminator, and recent movies like Manborg and Hobo with a Shotgun. It was part of Ubisoft's initiative to release downloadable content that would appeal to newcomers to the series, and the team was tasked to create something unexpected as Far Cry 3 downloadable content.

The game's development was completed in about six months. Gameplay is largely similar to Far Cry 3, though several systems from the base game were simplified or removed, and it introduces the titular blood dragon, a massive reptile-like creature that can be lured to attack hostile outposts. Players assume the role of military cyborg Sergeant Rex 'Power' Colt. Blood Dragon is a retro-futuristic parody of 1980s action films, cartoons and video games, and takes place on an open world island. It is a standalone expansion to Far Cry 3 and the eighth overall installment in the Far Cry franchise. Far Cry 3: Blood Dragon is a 2013 first-person shooter game developed by Ubisoft Montreal and published by Ubisoft.

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