The Donkey Kong hardware has the memory capacity for displaying 128 foreground sprites at 16x16 pixels each and 256 background tiles at 8x8 pixels each. Mario and all moving objects use single sprites, the taller Pauline uses two sprites, and the larger Donkey Kong uses six sprites.
This was a game released in 1981. By contrast, the Commodore 64, released a year later, spent most of the area of a fairly large complex video chip, providing just 8 sprites.
Admittedly that might not be 128 sprites per scan line, but judging by the size of the vertical comparator block on the VIC-II, there are significant costs associated with total number of sprites, even if not on the same scan line.
Admittedly an arcade machine can afford a larger hardware budget than a home computer, but sheer memory bandwidth is an important limiting factor on number of sprites.
So how did this machine do it?