First, I like the idea and have thought about it for some time. Namely, supporting mATX boards but instead of and SFX PSU mount, using a FlexATX in an attempt to try and keep the thickness of the console design at a minimum.
However, I'm not sure where you are only adding 20mm to the width. To normalize our verbage I want to define the dimensional terms as such:
[ATTACH=full]848[/ATTACH]
standard dimensions: mATX 9.6" x 9.6" (244mm x 244mm), ITX 6.7" x 6.7" (170mm x 170mm)
A Length of 327mm is not enough to support an mATX board with an SFX PSU (4.92" or 124.97mm). The total length required at a minimum would be 368.81mm (+extra for tolerance). That's an increase in the length dimension of 42mm (327mm - 369mm).
Then, I would have to ensure the GPU/PCIe devices can now clear the mATX board as well. The difference in height between the ITX and mATX is the same as the length (~74mm). Now, some games can be played here to try and overlap the PCIe device above the actual PCIe slot on the mainboard. However, most people want a 3-slot option and I'm unsure just how much width would need to be added to support a 2-slot PCIe device even if it were overlapping the mainboard. Let's assume 3-slot support is required. I would at minimum need to add the ~74mm to the height just to clear the mATX board and support the larger, wider 3-slot cards that the existing S402 supports.
This brings our new dimensions to:
369mm x 78.7mm x 442.3mm or 12.84L
A change in volume of 3.36L. I think there could be a good market for this design though as mATX boards support more PCIe slots (without bifurcation requirements to use more than 1 PCIe device), more m.2 NVMe options, generally a more affordable price, and better availability. Interested to hear any thoughts on this.