In the late 1980s, Color Dreams and Tengen were the largest producers of unlicensed games for the NES, but, due to pressure from Nintendo, Color Dreams faced many difficulties getting retailers to stock its games. Although Color Dreams violated no laws in opting out of the Nintendo licensing system with its workaround of Nintendo's lockout chip technology, Nintendo was displeased that it was receiving no revenues from Color Dreams games, and wanted to prevent other companies from following suit. Thus, Nintendo began to threaten to cease selling games to retailers that sold unlicensed NES games. Because retailers could not afford to stop doing business with Nintendo, unlicensed companies were at a disadvantage. Color Dreams thus had great difficulty getting access to the retail market, and decided to work outside of mainstream NES distribution channels. Also, many of their games were reported to have problems getting to run properly, and were criticized for their lack of quality and gameplay.

In 1990, Color Dreams began to consider producing games with biblical themes. At the time, there were few religious video games for console systems. Officials at Color Dreams saw that there was a market for them and that many stores that would be most interested in retailing Christian games – Christian bookstores – were likely not to sell video games at all, and thus not vulnerable to pressure from Nintendo. While many Christian bookstores at the time sold much more than books—they also sold religious movies, Contemporary Christian music, and other goods—such stores did not sell video games. In order to convince these stores to sell religious games, Color Dreams, through its new Wisdom Tree subsidiary (which would live on long after the demise of its parent company) worked hard to promote this new genre of video games. Wisdom Tree sent Christian bookstores 3-foot Bible Adventures displays, as well as VHS cassettes showing gameplay. These promotional videos made the case to Christian bookstores using lines like: "This game promotes Bible literacy and teaches children about the Bible while they play a 'fun and exciting' Super Mario Bros. style video game." Ultimately, these efforts proved successful, and Color Dreams was able not only to find a new distribution channel for its games, it was also able to launch a new genre of video games, which meant that no other companies competed with its new Wisdom Tree label.

Wisdom Tree's titles always had a Christian theme to them, and were often sold in Christian bookstores and the like. Most games attempted to use the medium to tell Bible stories in such a way as to make them interesting to children of the video game era. Interestingly, many of their games were partial conversions of titles previously released by Color Dreams, with appropriate changes in theme. A Wisdom Tree product catalog shows screenshots from Joshua & The Battle of Jericho displaying a side-scrolling game using the Bible Adventures engine. The actual released game used the Crystal Mines/Exodus engine.

The company's first release as Wisdom Tree was Bible Adventures, a three-in-one multicart which borrowed many gameplay elements found in the American Super Mario Bros. 2, applied to three different Bible stories: Noah collecting animals for the Ark, saving Baby Moses from Pharaoh's men, and re-enacting the story of David and Goliath. The game sold 350,000 copies, encouraging the company to continue pursuing this path of making games.

Other Wisdom Tree games included Exodus (a conversion of Color Dreams's old Crystal Mines game, with the story of the Israelites' 40-year desert trek grafted onto it), King of Kings (similar to Bible Adventures, but now featuring three events in the early life of Jesus Christ) and Bible Buffet (a "video board game" with Bible quizzes). They also released Spiritual Warfare, an action-adventure title similar in style to The Legend of Zelda, albeit with the requisite religious theme (the player, as a foot soldier in the Lord's army, is tasked with saving the souls of the heathen populace, using fruit of the spirit). The company also released ports of some of these games to the Sega Genesis and Game Boy, as well as Bible-reading programs (both King James and NIV versions) for Game Boy. Their Sunday Funday, a 1995 conversion of the Color Dreams game Menace Beach, is one of the last commercial NES releases in the United States.

Wisdom Tree holds the distinction of having made the only unlicensed game ever commercially released for the American Super Nintendo Entertainment System, Super 3D Noah's Ark. This conversion of the Wolfenstein 3D engine featured the player as Noah, attempting to quell upset animals on the Ark by flinging sleep-inducing fruit at them. Its shape (the only American SNES cartridge to not use the standard Nintendo-manufactured shell) resembles that of the SNES Game Genie or Sonic & Knuckles on the Sega Genesis, with a pass-through cartridge port at the top; the game requires an "official" Nintendo-licensed cartridge plugged into this pass-through, which allows the game to bypass the SNES's lockout protection and boot up.

The Wisdom Tree game King of Kings was listed as the honorable mention in Gamespy.com's "Seven Christmas Games That Make You Hate Christmas", due to its unentertaining gameplay and the farcical feel of dodging "acid-spitting camels".

Wisdom Tree is still somewhat active today, selling religious video games. The company released an all-in-one "TV controller" system featuring seven of their NES games in a single, self-contained unit. More recently, they have released Heaven Bound, a more modern 3D game for the PC. These games are produced on 3D Game Studio (e.g. Joseph and Galilee Flyer), using the default models that come with the program. All Wisdom Tree NES games are playable through the official website in the Arcade Section via vNES, a Java-based NES emulator.