Either the one from Microsoft or another from that era had multiple colors of cells, and an option to play competitively where before each generation you could add one cell of your color. Whether it was actually "fun" is another question.

I like this idea too and would love to see someone have a crack at it! But I think reaction-diffusion would be a nicer type of automaton/solver to use since it can just look a lot nicer and less aliasy (I have a huge soft spot for GOL of course, but it's so discrete and aliasy when you can see individual cells! And even all the cell-transitions are essentially instant too!)

Reaction-diffusion can definitely do complex life-like behaviour and plenty of other fascinating things! (Rob Munafo's Uskate-World being a great example!) And here's a YT vid of an experimental RD sim that I made a while back to illustrate:

https://youtu.be/W6sO8ZkgU9s?si=gGeZwX0ueYOFiKiD