Wikipedia
In computing, minifloats are floating point values represented with very few bits. Predictably, they are not well suited for general purpose numerical calculations. They are used for special purposes most often in computer graphics where iterations are small and precision has aesthetic effects. Additionally they are frequently encountered as a pedagogical tool in computer science courses to demonstrate the properties and structures of floating point arithmetic and IEEE 754 numbers.
Minifloats with 16 bits are half-precision numbers (opposed to single and double precision). There are also minifloats with 8 bits or even fewer.
Minifloats can be designed following the principles of the IEEE 754 standard. In this case they must obey the (not explicitly written) rules for the frontier between subnormal and normal numbers and they must have special patterns for infinity and NaN. Normalized numbers are stored with a biased exponent. The new revision of the standard, IEEE 754-2008, has 16-bit binary minifloats.
The Radeon R300 and R420 GPUs used an "fp24" floating-point format with 7 bits of exponent and 16 bits (+1 implicit) of mantissa. "Full Precision" in Direct3D 9.0 is a proprietary 24-bit floating point format. Microsoft's D3D9 (Shader Model 2.0) graphics API initially supported both FP24 (as in ATI's R300 chip) and FP32 (as in Nvidia's NV30 chip) as "Full Precision" as well as FP16 as "Partial Precision" for vertex and pixel shader calculations performed by the graphics hardware.
In computer graphics minifloats are sometimes used to represent only integral values. If at the same time subnormal values should exist, the least subnormal number has to be 1. This statement can be used to calculate the bias value. The following example demonstrates the calculation as well as the underlying principles.