Is it possible to run emulator from IC? and how?
Not a chance, I am afraid.  The Arduino cannot do what you think it does.

Yes, you could program the Arduino to act like some of the simple old video games, but there is no way it can run a pre-existing emulator program like your computer can.

You need something more like a Raspberry Pi - in fact there is an interesting project that might be just what you want: RetroPie