Exquisite corpse?

[FRET]

It's been done with sprites.
Generally known as collabs, or pixel duels.
(At least, when we had the checkerboard duels.)

There's a difference. When you do these, you cover all but a little of it, and they work off of what little they see. So they aren't working off your parts, they're just making a whole separate part that fits in with yours.

Of course, it wouldn't be completely blocked off, there'd be a theme or something so that it doesn't completely suck.

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http://www.csua.berkeley.edu/~scharpen/Corpses/
There are some good examples there too.