What ended up thriving on the PC-98 was not so much action games (though indie developers made some remarkable efforts) as RPGs (mainly native as well as Western), Turn-Based Strategy games, Visual Novels, and (overlapping with the previous categories) Eroge. A few important PC-oriented companies, including Compile, Falcom and Koei, maintained support of the PC-98, though even they started developing many of their important titles for consoles. Console battle in Japan was turning heavily in favor of consoles (including NEC's/ Hudson Soft's PC Engine). By the time the PC-98 overtook the PC-88 and MSX, the tide of the PC vs. Most earlier games for the system were essentially PC-88 games running on a faster 16-bit CPU (and identical video hardware). The PC-98's contribution to Japanese video game history is a checkered one. The same problem plagued early IBM PC's high-resolution EGA and VGA modes, which were initially not so popular with Western-developed games, but while Western text looked at least somewhat readable in low-res modes, Japanese developers were left without such respite.
Due to the need to display Japanese text with its complex characters, the developers were forced to use high-resolution video mode, which didn't have much of a color depth early models could show only 8 colors in 640×400 high-res mode.
The characteristic dithered look of PC-98 games is due to the system's idiosyncratic display hardware, namely a pretty anemic Video RAM.
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