I think this idea of fantasy console is pretty neat and turning them into "real" FPGA hardware would be amazingly cool to me!
I know this is a somewhat old post, so maybe the idea is long abandoned, but coinfeeder I wonder if you have seen this project: https://github.com/picolove/picolove
That would maybe be usable for the Linux side of things. It claims to run PICO-8 files but I don't think they have implemented any of the "IDE" etc.
Aside from a Linux implementation, I'm guessing a true FPGA port would be much larger endeavor though.
I have zero experience so far with FPGA design, but am interested in trying to learn. Since Lua runs bytecode in a VM, maybe it would not be too unreasonable to design some hardware around that.
I did a little bit of research on Lua VM and PICO-8 "machine" details and found a few resources which could be useful references:
If a sort of general Lua VM core could be made, then maybe those "Lua Assembly Tools" could be run on the core as a sort of "OS firmware" to help compile text based carts to bytecode "ROMs".
Or, probably an easier option, the bytecode compilation could be done with external tools outside of the FPGA and the core would just require to provide those pre-compiled ROMs in its own format.
Also I guess the editor UI, command line, etc could be written in Lua as well, (not sure but maybe PICO-8 software does this also?)
It looks like the PICO-8 system calls graphics/sound are all memory-mapped registers, so at least that one aspect would hopefully be straightforward to describe as hardware.
Of course there is the issue of PICO-8 being closed-source/commercial, so I don't know if there would be any copyright/trademark type legal concerns in duplicating the full editor interface etc.
The default palette and font at least are CC-0, see bottom of page here
There were also a few other similar open source fantasy consoles listed here
. As far as I understand from a brief glance, all of the others (besides picolove) are not meant to be PICO-8 compatible, and define their own variation of language API etc.
So the others could be interesting on their own, but it seems like PICO-8 has by far the larger community of developers writing games and demos.
Anyways, just some of my thoughts on that. If nothing else, I had some fun researching and daydreaming about this sort of stuff.