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The main appeal of these mini consoles is that the game play is different from the mainstream games of today.  (Nostalgia is a factor too, but not the main factor.)  Generations 3 and 4 had 2D gameplay for their main, flagship titles.  That is something you don't really get nowadays.  It is true that you can find people who want to play Hollow Knight, Sonic Mania, Ori, Octopath Traveler, etc..., but these are all considered "alternative titles".  In generations 3 and 4 they were the flagship titles.  The companies put their very best efforts into making the 2D games the very best possible. 

So any console that is generation 5 or later is just not going to have the same appeal.  3D games have, for the most part, gotten better with every generation (or at the very least stayed the same).  People aren't getting radically new types of game experiences by going back to generation 5 or 6.  But they are getting radically new experiences from generations 3 and 4. That is why Microsoft shouldn't make a mini console.  They don't go back to the 2D era.