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i was too lazy to type something up, so here's the wikipedia answer;

A chiptune, or chip music, is music written in sound formats where all the sounds are synthesized in realtime by a computer or video game console sound chip, instead of using sample-based synthesis. The "golden age" of chiptunes was the mid 1980s to early 1990s, when such sound chips were the most common method for creating music on computers. Chiptunes are closely related to video game music, which often featured chiptunes out of necessity. The term has also been recently applied to more recent compositions that attempt to recreate the chiptune sound for purely aesthetic reasons, albeit with more complex technology.

Early computer sound chips had only simple tone and noise generators with few channels, imposing limitations on both the complexity of the sounds they could produce and the number of notes that could be played at once. In their desire to create a more complex arrangement than what the medium apparently allowed, composers developed creative approaches when developing their own electronic sounds and scores, employing a diversity of both methods of sound synthesis, such as pulse-width modulation and wavetable synthesis, and compositional techniques, such as a liberal use of arpeggiation. The resultant chiptunes sometimes seem harsh or squeaky to the unaccustomed listener.


Steps toward the mainstream music world

Before the 2000s, chip music was rarely performed live, and the songs were nearly exclusively spread as executable programs and other computer file formats. The earliest examples of record label releases of chip music can be found in the late 1990s.[6]

During the 2000s, a new wave of chiptune culture took place, boosted by the release of software such as LSDJ for the Game Boy. This new culture has much more emphasis on live performances and record releases than the demoscene and tracker culture the new artists are often only distantly aware of.[7]