I used to buy midi sequences from a company that had real musicians play the tune with midi instruments. They may have then edited it on a pc. But the basic drum, piano, guitar, bass, sax, were played by humans. Of course their sequences were the best because they didn't sound machine made.
I think that answers your question, and of course there are some guys that do a great job creating sequrnces all on a pc or on their keyboard, the biggest trick is knowing your instrument inside out, what it will and won't do.
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