Yes they do. You can put PNG encoded images into an ICO format container. | Hacker News

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cornstalks on March 30, 2015 | parent | context | favorite | on: Inventing Favicon.ico

Yes they do. You can put PNG encoded images into an ICO format container.

talideon on March 30, 2015 [–]

Only as of Windows Vista, and how well supported are ICO-wrapped-PNGs in browsers?

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