You mean the setting? If you add talking fishes, sponges or whatever then sure. Just don't make it a 'it's totally underwater, trust me, bro' but it's a normal city but blue.
can i do a game about the origins of sandy ( also would it be cringe if i made every main character legally distinct from SpongeBob characters like sandy is now salty and SpongeBob is spongeJon
Idk what the rules for derivative works are for spongebob specifically, like, legally but as far as the jam is concerned , it's fine. I don't think they'd throw a cease and desist at you but do check your stuff. Besides that, sure, make it. Just don't use the official art.