Chiptunes are songs that are produced exclusively with computers.
The origin of chiptunes is the home computer and video game era. Particularly the musicians of the Commodore C64 and Amiga developed a great scene of chiptune composers.
The original chip tunes are generated by the synthesizers of sound chips, which generate the corresponding sounds in real time.
The term got spread around and got more known with the increasing popularity of trackers, in so called mod files were done. Various tracked modules and chiptunes have also been used in games. In trackers very small instruments are used, as many people wanted to preserve the characteristic chiptune sound and took only short samples or defined notes loops from musicial instruments or randomly recorded sounds. This has the advantage that the generated files will remain very small.
The small size makes it especially interesting for chip tunes from the demo scene intros and cracktros where you need it to use as little disk space as possible.
An explanation by awesomecast.
There are several misconceptions when it comes to chiptunes. Nowadays, some people still confuse MIDI music or ringtones with chiptunes. Another false rumor is, that chiptunes have to be generated on a gameboy only, in order to be true.
The most popular computers which help in the creation of chiptunes for over 25 years are:
