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The game was co-developed by Capcom and Cavia and produced by Masachika Kawata, who was behind the PS2 port of Resident Evil 4. At E3 2006, Capcom officially announced that development was already underway for an exclusive Resident Evil game for the Wii and mentioned that it would take advantage of the console's unique Wii Remote controller, giving players a new experience in the series' franchise. Members of Capcom's Clover Studios, who created such games as Viewtiful Joe and Ōkami, were called upon to help develop the game.
A short clip of the game was shown on the Nintendo World event on November 3, 2006, where 2007 was revealed as the release date. On April 6, 2007 the official Japanese website went live containing an official teaser video. On April 13, 2007 the official Japanese website updated with a second trailer, character profiles and screenshots. Capcom is planning on releasing the game with a limited edition collector's biohazard box featuring several items along with the game itself. Christian Svensson, Capcom's senior director of strategic planning and research, stated the game will support 480-progressive scan and 16:9 wide-screen resolution. A trailer was included in the Wii Edition of Resident Evil 4, which shows the mansion from the original game and areas of Raccoon City. On July 11, 2007 Nintendo announced at the pre-E3 press conference that the Wii Zapper peripheral will be compatible with the game.
The game was initially going to play similarly to Resident Evil 4. However, in an interview with Famitsu, the game's producer Masachika Kawata revealed the reason for the drastic change in gameplay: according to him, "Wii users like easiness" and that a Resident Evil 4-style game is "too complicated" for Wii users to enjoy. Masachika Kawata then elaborated that "complex operability can be an obstacle for Wii users", and that he purposefully had to "compromise to a lower difficulty level" and "reduce enthusiast-only elements".