Right now, this project is working OK and I'm pretty happy with its performance. 

RPi Zero is not a powerhouse so yes, this game console isn't exactly powerful enough to run SNES Games without lags for 3-4 Hours. 

the Next Version will Feature a more slim and better version of the Overall PCB with a Display mounted on PCB or something similar and it will be powered by a Raspberry Pi Compute Module, 

I haven't decided between Compute Module 3 and 4. Using 4 will be overkill in such a normal project but maybe the Compute module 3 might not be able to run this setup perfectly so I'm not entirely sure which module to choose. (I will choose Compute Module 4)