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Frog City Software was founded by Rachel Bernstein, Bill Spieth and Ted Spieth in 1994. In 2003, following the release of Tropico 2: Pirate Cove, Frog City Software was acquired by Take-Two Interactive. On January 25, 2005, Take-Two Interactive announced the opening of publishing label 2K, which would henceforth manage its development studios, including Frog City Software.
On June 6, 2006, Snow, a game about drug trafficking in development at Frog City Software at the time, was canceled. It was presumed that the move occurred as an immediate consequence of the 2005 Hot Coffee controversy. Frog City Software shut down later that year. Veterans of the studio established Sidecar Studios as a successor but disbanded a year later to pursue other interests.