Yes exactly, you define a palette for your game (or for specific screens in your game) by picking from the available 32 colours.
Most games only use the official palette (default 16 colours), which contributes to pico8 games being easily recognizable (also thanks to resolution and default font!), some games change a few colours, some change all 16 slots. There are some nice examples on the bbs (pico8 forum) or twitter — if you join the pico8 discord server I could find some (I have the same nick there).
This is unofficial documentation: https://pico-8.fandom.com/wiki/Palette A tool to try and convert any image to a palette: https://github.com/axnjaxn/PicoImageProc (two notes: source images should be 128x128 for best results; the resulting palette is often jambled compared to the original)
(Note that there’s a palette swap technique that’s easy to use for example to recolour a green mushroom to be red, or make an animated sprite by packing multiple frames in one sprite. And there’s a secret trick to show more than 16 colours on one screen but it’s not easy and I’m not sure it would work for a tileset used for background anyway.)
Thank you, I will definitely check into this more! Finishing up a PICO8 experiment on this set. It's been quite challenging getting it to look right but its a blast!
