A pair of researchers, one from Microsoft and the other from The Hebrew University, have come up with something that will be either a game purists' salvation or worst nightmare, depending on tastes.
Johannes Kopf and Dani Lischinski are the men behind an algorithm that is able to take an 8-or-16-bit pixellated image—like those found in old video games—and smooth it out into a clean, scalable vector image.
While rather primitive examples of this have been around for a while (anyone playing an XBLA or PSN version of a retro game will have seen the "smoothing" options), and in other tools, this one was written especially for classic video games, so it's a lot more effective.
It's able to look at the direction pixels and their colours are facing, and from there work out how to render the image in a smoother, more detailed manner.
There's a complete explanation as to how it's done here, but I'm a lot more comfortable just calling it "magic".
Depixelizing Pixel Art: Upscaling Retro 8-bit Games [ExtremeTech]