there lies the issue.I was thinking exactly that same thing until I realized this.
on a pc you need to have the window your using selected,and only one window can be selected at a time.
it'd be like if you had your browser open,taking up half the screen,and clicked on the desktop,then afterwards tried to type into the search bar.it wouldn't work because the browser is now de-selected and the desktop is the selected window.
this is what would happen with the second instance of the game.you cant have both selected so one player would just be pressing keys and nothing would be happening since the VM is de-selected,or if the VM is selected then the main instance of the game is de-selected.
along with that unless it's a really light game it would be difficult to run from a VM as a second instance even if you have a genuinely beastly pc,something along the lines of an i7,16GB ram,HDD with fast read speeds or SSD.
well why not? with enough hard work you could program a pc to do any thing. the thought is that you have one window that has two programs running inside it similar to a VM. then i pair a mouse and a controller to the first game and those have no effect on the second window which is controlled by a wired xbox controller. this making you able to run two players off the same computer.
Just think Battlefield Vietnam on 5 way eyefinity with 5 different people playing on it.