You guys realize that there should be a distinction into 3 categories:
- Before the advent of scanners. Everything was pixeled by hand in Deluxepaint, sometimes with helpers stuck to the screen, but still
(Before 1991)
- Scanned 2D artwork, then reduced to 256 or 32 colors and hand treated for line clean up & better color palette translation
(1991-1994)
- Scanned or even 3D based backgrounds with integrated 3D prerendered objects helping with perspective and also probably with better tools to translate over colors into game palette
1994+
Those are three interesting points in technological innovation of sprite art, but there's a lot more to it than that, I'd say.
For example, a company in stage 3 doesn't always use 3D background or 3D assets for reference in thier art, although it is definitely a great method. You can clearly see 3D images translated into sprites in some of the SNK stuff for example (such as the Giant bell in Garou), but there are also many aspects of the backgrounds that are pretty obviously painstakingly rendered, pixel by pixel, perhaps based off of 2D concept art. Pixel art that has simply been rendered then downscaled has a very obvious and distinct look as well.
For example, portraits in the game Breath of Death by Zeboyd seemed to use down-res photoshop art, as opposed to a pixel-by-pixel creation, while SNK recreated the character animation in KOF XIII overtop of 3D model renders.