You are observing the video of the crab playing over an SSH connection inside PuTTY, a terminal emulator.

I "think" it's a program that plays video (incl hi-res) on the terminal using pure text without using GPU decoding at all.

How much more space efficient is a pixelated video using pure text like this?

Relative to using a real codec at the same resolution? Not at all. That's not the point.

Isn’t the resolution greatly reduced?

A low resolution text stream gzipped may turn out to be smaller I think.

Sure, but then your comparing apples and oranges. If you take a 4k stream and turn it into 80x25 resolution (ok, its not exactly that) its of course going to be smaller. But if you compare the same resolution, the one using a video codec is going to be smaller. Even uncompressed its going to be smaller in a raw video format compared to text based escape codes (although i dont know what gzip would do compared to uncompressed video)

Probably larger if you compare to full ASCII frames, but you could probably apply the same compression techniques used on video frames to the ASCII format as well. It’s just a grid of “pixels” after all.