most of it is simply the result of the analog production process, and the losses inherent to each step. so you basically overshoot with bold colors so that it still looks decent at the other end.
older cartoons were produced with cells and photographic film. in that process you are literally blocking or transmitting light through both the cells themselves and the film both at the time they’re photographed and reproduced and eventually transferred to whatever electronic signal, which back then was also analog and had its own transmission loss.
every part of that process will result in a loss of both detail and ‘dynamic range’ so to speak because trying to pass a light through something while also having it be opaque is a conflicting process.
add into it all the other hand production methods, cell paintings, the relative quality of transfer technologies at the time, and yes the fact that its end was to show up either on a low res tv screen or a movie screen, which although capable of high detail theoretically, between multiple showings, flicker, and reproduction also be degraded.
in addition each color beyond just a flat reference color requires more attention to detail to keep consistency between artists etc.
we really take for granted how much the digital process has opened up for art reproducibility in the last 30 years.
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