Don't consider the subjective factors here like art style or character design.....what 2D game(s) really pushes the envelope in terms of what can be accomplished with sprites and animation? For the sake of narrowing things down, let's exclude FMV-based titles. Dragon's Lair will probably always look great, but I'm more concerned with titles that have something more akin to realtime graphics. Consider stuff like the fluidity of animation, size and detail of the sprites, the number of active characters onscreen, etc.
For a long time the king of this category was Street Fighter 3, since it had huge detailed sprites and tons of animation frames. After that, people leaned more towards the later Guilty Gear titles that offered 2D assets at HD quality. Recently Cuphead has become a contender as well, since it pretty much looks and acts like a playable cartoon.
For a long time the king of this category was Street Fighter 3, since it had huge detailed sprites and tons of animation frames. After that, people leaned more towards the later Guilty Gear titles that offered 2D assets at HD quality. Recently Cuphead has become a contender as well, since it pretty much looks and acts like a playable cartoon.