Put it simple your computer sends 3D models and textures to your graphics card which then renders a 2D image in real time (many times per second) which is then sent to the monitor (which is connected to your graphics card).
Before graphics cards the CPU did all the graphic calculations and they where so weak that they could only draw 2D (pixel by pixel, no 3D rendering). But they got more powerful and they could render 3D as well but 2D and 3D where separated.
As 3D hardware, and 3D hardware acceleration, became better and better someone realized that it would be faster to make 3D sprites out of 2D images and take advantage of the 3D acceleration then just drawing the images on screen.
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