I saw a jam once that had that graphics requirement, but it also had a weird memory requirement that the jam host couldn't define well. I made an ace attorney clone for it. I find that resolution is really fun for making low-res visual novels in, and the images compress pretty easily.
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I've been thinking about another challenge where it's the same thing but instead of 1-bit, it's 1 color per sprite
Are you looking for 3-channel music? If so, I am down. I've worked on a few pico games.
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