Perler beads are round, plastic beads that you place on a pegboard, then melt together into a solid image with a clothing iron. Due to their similarity to pixels, many people make video game sprites into perler bead projects.
Phantasy Star Online coaster set, featuring (top left to bottom right) monomate, weak attack, monofluid, barta, foie, and zonde.
My first Phantasy Star related bead project
Here are some others I've done.
Ryu's win pose from Super Street Fighter II (SNES)
Enguarde the swordfish, Donkey Kong Country (SNES)
Amy Rose, Sonic Advance (GBA)
DK, Donkey Kong Country (SNES)
Squawks, Donkey Kong Country (SNES)
Donald Duck, World of Illusion (GEN)
Dynamite Headdy (GEN)
Luna, Lunar: Silver Star Story Complete (Playstation)
Zombie (and various health pick-ups) from Castlevania: Symphony of the Night (Playstation)
Sonic "time travel" sprite, from Sonic CD
Raphael, from Teenage Mutant Ninja Turtles IV: Turtles in Time (SNES)