Couple things about the virtual boy:
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It was pixelated, it was nowhere near the power of the home consoles. It sits between the Game Boy color & Game Boy advance.
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It had an LED display in the mid 90’s, hence the monochrome. Making it full color would have been cost prohibitive, as they would have had to add in 4 more displays (two for each eye), and triple the storage for games as everything would have to be rendered 3 times.