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.

On second thought XB needs to triple down. They already doubled down and brought "the duke" controller back, so why not put it to good use with an XBOX SUPER XL? It'll go great with the recent Nvidia Super Series GPU marketing. If it's not the right time to go smaller, why not go even bigger?

So which 16-bit Windows games do you miss?

Most games for Windows 3.1 also had a DOS-mode (which usually ran a lot faster). Windows was an afterthought for games until the launch of Windows 95, so almost any PC game until then runs in DOSbox.

Windows-95-games without Win3.1-compatibility were already 32-bit and most of them run on Windows 10.

Then we have dozens of point&click adventures of that transition era (f.e. King's Quest VII), which run perfectly on ScummVM... and ScummVM itself runs on a lot of different devices and operating systems.

I'm really curious which old Windows games still worth playing aren't running on Windows 7, 8 or 10.

Did you forget these?

@bolded: That was for Win95/98. Windows 3.1 brought a slew of enthusiasts who wanted to program games strictly for that platform. And since Win95 and 98 are 32 bit OS, they don't have that problem.

Stars! would be a big one.

Spaceward Ho! is another one.

Castle of the Winds is one, too.

Enemy Nations is yet another one. 

I can't get Battle Isle 3 running on my Win10 PC, not even the GOG version. That game was always finicky to begin with and seriously ahead of time (it came out in 1994 but needed the upcoming Windows 95 to run properly), which makes it break some future conventions, I guess.

And that's just a couple of the games I can't play right now. Well, I could with a virtual PC and a 32bit Windows installed into it, but those are both getting hard to come by, tend to get expensive and finicky to set up for playing classic games.

Another problem with those old games is that often the installers of pre-2000 games are 16bit executables, meaning you can't install the games even though they themselves would run just fine.

Not all games are backwards compatible. - In-fact not even half are.
Only 27.3% of the Xbox 360 library and less than 5% of Original Xbox games were made backwards compatible with the Xbox One before Microsoft abandoned their backwards compatibility efforts.

Isn't that precisely why it would work as a mini?

False. Windows 10-64bit is capable of running any game, regardless if it's a 16-bit title or a DOS title. Or both!
More than happy to give you a small hint as to how... ;)

You can pick up brand new OG Xbox controllers off Ebay for like $10 AUD that works fine with the OG console, got a couple myself actually.
Xbox One controllers seem to be gold minted though...

I think the biggest cost would be the SoC and NAND... Trying to emulate full Shader Model 1.4 isn't exactly going to be an easy affair for a chip that powered the NES/SNES Classic... Remember the Playstation Classic had terrible performance partly because of it's under-powered cheap ARM SoC.

And Microsoft never used a storage medium smaller than a DVD. - 4.7GB ISO dumps will get expensive pretty damn quick... You would need around 64GB of NAND for just 12 games... And going with TLC or QLC is probably not viable due to longevity.

Correct, and if they made a Mini Xbox it will play less than 5% of the Xbox library since these minis only have 10 to 20 games built in and being a modern system, id expect 10 games for a mini Xbox or PS2. So you are better off just playing OG Xbox games off the X1 BC.

Have they stopped supporting BC? I thought they only stopped temporary due to there focus on the Scarlett?

Or they could put games that aren't BC on the mini console... Like I said less than 5%. (3.9% to be exact) of Original Xbox games work on the Xbox One. - There is still another 96.1% of the Original Xbox Library that can be chosen from and dropped in an Original Xbox Classic.

Same could be said about the SNES Classic, lots of those games were re-released on the Wii/WiiU/3DS and so on... But that didn't decrease how damn awesome the little SNES Classic was.

The only statement we have had from Microsoft in this regard is that they are abandoning all backwards compatibility efforts on the Xbox One (Xbox 360 Backwards compatible with the Original Xbox was abandoned years ago) in order to ensure that all the Original Xbox/Xbox 360/Xbox One games that work on the Xbox One will work on Scarlett.

Obviously Microsoft is still patching/updating the Backwards compatible games on Xbox One currently though and that will likely continue through with Scarlett... But as far as more games for the Xbox One. That scheme is well and truly over now... Which was expected I suppose.

Personally if you prefer Original Xbox+Xbox 360 games... You are better off just getting an Xbox 360 over the Xbox One to be honest. - You get almost 4x more Xbox 360 games, you get 11.2x more Original Xbox games supported, it's a no brainer really... Plus Xbox 360 consoles are dirt cheap pre-owned these days.

What I was thinking.

Also, being able to get 20+ SNES games at an affordable price seemed pretty impressive. I've been doubting the possibility of Nintendo doing the same with the N64, given how much they value their backlog, but I suppose we'll see.

But an Xbox Classic would be on par with a Gamecube Classic or a PS2 Classic, and at that point the budget to make a game had gone up considerably and it's hard to see 20+ games from that gen being released at an affordable price.

If they just have full blown backwards compatibility, that would be great. Maybe with Project Scarlett, that would be good. I hope they also add more such games to Game Pass.