If you think about it, many of the most memorable game character sprites were created through painting pixels on a screen. Mario and Pacman are not remembered for their fancy 3D shading but rather for their classic iconic looks.
Good pixel art involves an intricate knowledge of color and lighting. You must choose the best shades for shadows and highlights, then paint them over the right pixels to make your pixel art come to life. You only have so much space, so you have to make every pixel count.
Here’s my latest pixel art character – a hobo monkey whose knapsack doubles as a weapon/water balloon/intimidation device.