The USB-Gamepad controller translation can easily be performed by one AVR micro controller and V-USB firmware stack.
The Nintendo gamepads can be read witn one ATTiny85 microcontroller. This is the case of NES, SNES, Nintendo64 and Gamecube controlers.
Other brands like ATARI, Sega Genesis, Sega Master System and Playstation requires more pins and then a bigger chip like the ATMega8.
Firmare for the controllers can be ported from #AVeRCADE or from the Raphnet collection (there are other repositories though).