To provide a display device whose display can be recognized even in dark places or under the strong outside light. The display device performs display by controlling the number of gray scales in accordance with the intensity of outside light, which means a display mode can be switched in accordance with the data to be displayed on the display screen. A video signal generation circuit is controlled in each display mode in such a manner that it directly outputs an input video signal with an analog value, outputs a signal with a binary digital value, or outputs a signal with a multivalued digital value. As a result, gray scales displayed in pixels are timely changed. Accordingly, clear images can be displayed while maintaining high visibility in various environments, in the wide range from, for example, dark places or indoors (e.g., under a fluorescent lighting) to outdoors (e.g., under the sunlight).