Lol. Yeah I am seeing it.
The micro already exists, and the shift register is needed to mux 8 inputs down to 3 pins of a micro.
The four inputs of a digital joystick, 2 extra buttons, and two switches in an SD card socket.
Retro gaming was an example because the older sticks work the same way,
and are not already multiplexed by some method.
No wrecking the joystick part by cutting it either.
In the case of 74HCxx input logic it takes a grand total of 4 resistors.
Connect both pot centre wiper pins to ground, directions to the outside pins,
and an additional 4x10K resistors tied from the directions to tie them normally high.
You're not seeing it: The micro is the shift register.
(or can be)
It has direct access to the pots and emulates whatever interface to the outside world you're imagining.