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When graphic designers from Taito, SNK and other companies used a joystick to draw dot by dot.
In 2014, former Taito graphic designer Atsushi Iwata posted a picture of
the device he used to create pixel graphics. This custom joystick was
connected to a X68000, a computer which was used as a workstation by
many Japanese video game companies until the mid-90s (although companies
such as Sega and Westone used a PC-98 to develop some, if not all, of
their games during this era).
There is one button per function hence the
20 buttons featured on the control panel. The software used by Taito
was called Taito Animator.

While it seems odd to use such a device, it wasn’t that uncommon. Hayato Takano (past works unknown) recently posted a picture of a similar device and added that some developers were still using the X68000 version of this device until 1998 (Windows 95 pretty much became the standard OS in the late 90s and Japan was no exception).
A Windows compatible version was made as well as a PC-98 version.

A few years ago, Spoon, a member of The Madman’s Cafe, posted a message in which he recounted a story one of his co-worker told him:
“The sprite editor used by artists for a number of SNK fighting games (Art Box) was written for the Neo-Geo, and uses the Neo-Geo as the interface. As in, you would use the joystick and the buttons to draw the sprite. He didn’t believe this when he started there, until one of the higher ups showed him by firing up one of the machines and drawing a kickass sprite of Robert Garcia in like 10 minutes”.
I don’t know why some companies decided to use a joystick to draw. It was probably faster than a mouse and less costly than a digital pen, but, as you may guess, it was pretty noisy.
On a related note, another developer (Tonya_Plan) posted a picture of a keyboard used to create graphics (circa 1992).

Sources:
https://twitter.com/Tonya_Plan/status/758257142109392897
http://www.mmcafe.com/cgi-bin/forums/bbs/messages/13519.shtml#70395
https://twitter.com/gantan/status/449437866406330368
https://twitter.com/Takano_Hayato/status/859226948240683008
https://twitter.com/Takano_Hayato/status/859300262455918592
https://twitter.com/Takano_Hayato/status/859229323055710209
https://twitter.com/Zerochan/status/859301646756491264
https://twitter.com/mutyasensei/status/449730507639508993
http://www.neogaf.com/forum/showpost.php?p=208105584&postcount=136
Modern pixel artists have got it easy, man.
