I often get mail from people who want to try to make their own pixel fonts so, rather than replying multiple times, I'll explain it all here. It's not a full tutorial, that would need a whole book and one specific to the font editor you choose but it will set you off in the right direction.
Designing a pixel font is a two-part process the design and the production. The design can be done on a piece of graph paper or with the pencil tool in your favourite paint package whichever you fancy. You can even get hold of a few dozen inch square terrazzo tiles and play around with them around on a table. The basic principle is that the letters are made from little squares arranged in different ways.
As the paper and tiles approaches are no-brainers, I'll explain how I designed some of my fonts in Photoshop but if you don't have Photoshop, just about any paint program can do the same thing.
The pencil tool in you paint program draws a single pixel. Single pixels are a bit hard to see so zooming-in to about 800% makes things much easier.
In Photoshop, it is possible to have two views of the same document so I keep one at 100, to see the final result but work in another window where I'm zoomed-in.
First, you need a baseline. Make a horizontal guide in the middle of your page for all your letters to sit on.

A semi transparent grid pattern on another layer helps to align the strokes.
At their smallest sizes, pixel fonts are all pretty much the same. You will find that you need at least five pixels to draw an 'e' or 's' and that is really your starting point. After that, it's just a matter of drawing and deleting pixels until you get what you are after. You will probably want to do A-Z, a-z, 0-9 and the common punctuation characters. If your language is not English, you will also want to design those special accented characters that are used in your own language.
You will find that it is best to stick to squarish letterforms. Circles and curves don't work very well with pixels. The other things to avoid are diagonal lines that are not 45°. At 45°, pixels join at their corners and give straight lines. At other angles, you get jagged lines that just don't look right.
When you've designed the complete character set, then you can think about making it into a font that you can type from your keyboard.
To make a font that you can trpe from the keyboard, you need a font editing program. Unfortunately, there's not a big choice in font editors these days. There may be some shareware ones around but I'm not familiar with them.
The two main font editing programs generally available are Macromedia Fontographer and FontLab.
Fontographer is a very old program that Macromedia took over from the original developers, Altsys, and didn't do very much with. It was last updated in 1996 and is now effectively dead in the water. It's still available for Mac OS9 and Windows at $349 but there is no OSX version.
in Fontographer, the 'pixels' are drawn with the rectangle tool like this. None of the other tools are required.
On the plus side, Fontographer is relatively easy to use, especially for beginners. It's designed for creating printer fonts primarily, but will handle pixel fonts with a little extra effort.
FontLab is a much more sophisticated font editor, more up-to-date and capable than Fontographer, but will set you back $549 for starters, so you need to be pretty serious. FontLab is available for Mac OS9, OSX and Windows but with all the bells and whistles it provides, can take a while to master. It also has a number of bolt-on programs to add to its functionality, one of which is a pixel font editor called BitFonter. At the time of writing, BitFonter is only available for Mac OS 9 and costs another $499 although there is a bundle deal of Fontlab + BitFonter for $899. You can download demo versions of these programs and their manuals so that you cans see what you are letting yourself in for.

BitFonter gives FontLab pixel editing facilities for a price!
If you only want to play around with font design casually, the price and complexity of FontLab/BitFonter will proably put you off. For professional type designers, there isn't really any competition.
There are several font formats in use these days but the two main ones are Adobe Type 1 PostScript font and TrueType - invented by Apple.
Type 1 fonts are generally used for print in conjunction with DTP programs like Quark XPress and Adobe InDesign. They come in two parts, a vector outline (printer) font and bitmap (screen) font. The bitmap fonts are only used on older systems to give a rough approximation of what the printed result will look like. On modern systems, the screen display is generated on-the-fly from the vector font.
More common these days, TrueType fonts are outline (vector) fonts and don't require a separate bitmap screen font, the screen display is rendered from the vector outline.
In principle, TrueType fonts are capable of higher quality than the older PostScript fonts because they have more 'sample' points. In reality, the quality of the 'cut' is generally better for PostScript fonts because of the skill of the designers. For pixel fonts, TrueType is the obvious choice.
Whichever program you choose to use, making a pixel font is only a matter of transferring your pencilled design to corresponding square shapes in the font editor. If a number of squares run together, then you can draw a rectangle but before you start, you should make a grid of guidelines.
If you count the number of pixels from the top of the highest character to the bottom of the lowest, that is the 'pixel height' of your font. You can add a few extra pixels of line spacing above and below if you like.
Draw horizontal guidelines for each row of pixels and similarly, enough vertical guidelines to allow for the widest character generally the thousand percent symbol. If you then switch-on snap to guide, your drawing with the rectangle drawing tool will lock-on to perfect pixels.
You need to add a certain amount of space at one or both sides of each character. This is called the 'sidebearing' and depends on the size and style of the font but it must always be an exact number of pixels so there is no possibilities for subtle kerning. It's best to start with one pixel space on the left and one on the right of each character. It's not until you do a test setting that you can decide whether to increase or reduce the space on one side or both. It's something that you learn from experience.
When you have drawn all the characters, then you can generate the font.
When it comes to saving the actual font, you have a number of options to consider. Firstly, are you using it on a Mac or a PC. Fonts are different between Mac OS and Windows both in the file format and in the order of the characters. Characters with ASCII values between 32 and 127 are common to both platforms but the characters from 128 up are in different 'encodings' or character order, and different again according to your language.
The most common encoding for Macintosh computers is 'MacRoman' and the Windows 'standard' encoding provides slots for characters from 128 to 255 with some slots 'reserved' for control characters.
More recent 'Unicode' fonts have slots for thousands of characters so that you can include characters, or 'glyphs' for multiple languages if you like.
When you have chosen the appropriate encoding, you can generate the font file.
Install your font in the usual way and try some test settings. Copy and past a chunk of text from anywhere into you paint program. Select it and apply the font you have designed, whatever you called it when you saved it. Make sure that the document resolution is 72 pixels per inch and set the font size to the the same size as the number of vertical pixels that you used for your grid. Make sure anti-aliasing is turned off and that no stretching or kerning is in operation.
All being well, you should have a crisp, sharp font with no blurring anywhere. You now have to look at the character shapes and the spacing between them and make a note of anything that needs to be fixed.
When you have done that, uninstall the font before going any further and put it away somewhere out of the way or better still, trash it completely. Go back to the font editor and make the adjustments you noted down, regenerate the font, reinstall it and try again. You will probably have to go round this sequence of events a number of times until all the quirks are ironed out.
Apart from the expense of the font editors, font design requires a great deal of patience and a considerable amount to time. The glory is in the detail so you really do need an 'eye' for it. If you luck enough have these attributes, designing fonts can be very enjoyable, even therapeutic. Don't expect to make a great amount of money out of it, not quickly anyway!
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