Matthew created a pixel art background and characters for a game using various tools in the software. He used the pencil tool to draw the background, characters, and arms in pixel form. He also used the erase tool and pencil tool to redraw an arm holding a gun. Matthew added a black background and text using the paint bucket and text tools to create a start menu and loading screen with a western theme. He changed the background to black again using the paint bucket tool to represent a change from day to night in the game and add variety.