The Commodore 16 belongs to the Commodore 264 series (with the Commodore C116 and Plus/4). It was designed to replace the Commodore VIC-20, but it was not compatible with the VIC-20, nor with the C64.
It had the same characteristics as the Commodore Plus/4 : same graphic resolution, same sound system, same CPU and speed, just less memory. It featured a version of the original 6502 CPU named 7501, and a new video chip named TED. With 16 colours, and 16 shades of colour, it had an amazing 128 colours available. There were no hardware sprites like the ones on the VIC II chip, so animated games and collision detection were very hard to do.
It featured a more powerful BASIC interpreter than the C64 or VIC had, however, making
graphics and sounds easy to program.
The Commodore 16, like the Commodore Plus/4 was a commercial failure and had little success.
It seems that the first C16's had the two control ports labelled JOY 0 and JOY 1 instead of JOY 1 and JOY 2--a note to collectors.