[grujicd]

Lot of posts here say that dithering is something we did in "good old days". Dithering is still very much alive, just not as needed on general web sites. But it's critical when you need to squeeze animation sprites for games or multimedia projects. These sprites typically need transparency, and precise control over which frame is displayed, so standard video codecs can't be used.

So 8-bit palettized PNG sprite sheets are the most convenient way to do it in the browser, where it's not efficient to manually unpack some custom format.

I highly recommend pngquant tool with its adaptive dithering algorithm for compressing sprite sheets. One of main features is it uses partial transparency colors in a palette, while few other tools I tried just support on/off transparency, which is far from great. Especially for antialiased semitransparent edges. pngquant works beautifully with these cases.

https://pngquant.org/