Here is a project I have been following over at AVRfreaks. A guy known only as Brad has developed an entirely AVR based game console in a surprisingly short amount of time. The console uses one microcontroller for the low-level video stuff, and another micro for sound generation. The “cartridge” can consist of any microcontroller of your choosing so long as it has enough IO lines to interface with the console. A unique RAM sharing setup makes the whole system very fast. I’m thinking about designing PCBs for this project when he releases his schematics.