Can it do pixel art backgrounds — not just sprites but full environment scenes?
Yes, and the environment work is one of its strongest modes at higher resolutions like 128x128 or 160x144 (Game Boy Advance proportions). It handles layered parallax-ready backgrounds with distinct foreground, midground, and background planes, atmospheric perspective through colour desaturation at distance, and tileable elements for side-scrolling games. A prompt like 'misty forest clearing at dawn, pixel art, 160x144, five distinct colour planes for parallax, tileable ground layer, animated water surface indicated with alternate frames' produces something that could go directly into a game engine with minimal adaptation.