Hi Ethan,
From what I see, you did this correctly. Barry does not look pixelated like he would if you zoomed in. Those ‘bad’ outlines are a typical indicator for a sprite zoomed out.
The problem is that Unity cannot interpolate the pixels to make the sprite look nice. It runs some algorithm. ‘Nice’ depends on personal preference, though, and Unity does not have any personal preferences.
To solve this problem, there is something called mipmaps. This would require you to do some research yourself. Maybe you’ll have to scale the sprite down in another program, polish the scaled down sprite, and save it as a new image file. Then you use both sprite in Unity.
If you are lucky, enabling ‘Generate Mipmaps’ in the Texture Import Settings does that job for you. Test the different settings to see if you are able to get the desired result. However, from my personal experience, some sprites need manually created mipmaps to look good, so don’t waste too much time with Unity’s limited tool.
I hope this helped.
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