[4] Coding on the PICO-8 is accomplished through a Lua-based environment,[5] in which users can create music, sound effects, sprites, maps, and games.

The program can load games saved locally on a computer, in the form of text or as specially encoded .png images.

The interface also supports a splore mode, where games uploaded to the BBS can be previewed and then played in the PICO-8 program.

[10] As of v0.1.11,[11] users may export Pico-8 cartridges as stand-alone executables for Windows, Linux (64 bit), Mac, and Raspberry Pi.

During development, Joseph switched from BASIC to Lua 2 syntax as the latter is easier to use and more capable as a programming language.

The 16-color palette was inspired from Commodore 64, 4-channel trackers from Amiga 500, and overall aesthetics from other 80s hardware such as Apple IIe and Famicom.

He coined the term fantasy console to describe systems like PICO-8 that have deliberate limitations to fit a hypothetical hardware.

Among these are TIC-80, which styles itself as a "fantasy computer", and Pixel Vision 8, which allows the user to specify the simulated hardware limitations they wish to develop under.

[31][32][33] PICO-8 has also seen interest among the demoscene, due to its harsh restrictions attracting programmers and musicians who wish to make retro-style demos for the console.