Sprite

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A sprite is a rendered 2D graphic used mostly in the SNES and Genesis days. It is not the background. Sprites are often on a different layer as items or characters. Sprites usually have some transparency.

As games went 3D, sprites became rarer, replaced by models. Sprites were still incorporated, since they were smaller files, for less important things such as backgrounds (The crowds in games like WWF No Mercy had sprites for crowds) or various explosions (Super Smash Bros. Melee used many sprites for items & hit explosions).

Sprites tend to take longer to animate then models, because they require redrawing, while models only need to be moved. Because of the time it takes, sprites are often the subject of palette swapping.