[Grognak]

Here's a neat video, where Miyamoto describes some of the processes. You can see near the beginning that the sprites were hand drawn on graph paper and translated onto the computer. https://www.youtube.com/watch?v=DLoRd6_a1CI

[Scuds]

Alllllll that tooling had to be built in-house. Sprite editors, level editors, debug and test tools. Doing it well requires multiple people working across multiple games.

I guess smaller studios were left having to roll their own stuff, which set them at an even further disadvantage to the Capcoms and Konamis of the world.

IIRC an NES dev kit was mostly just the hardware and a manual, not even an assembler