Watts are not as important as good speakers. I remember back when the dinosaurs roamed the earth I got a home theater in a box kit... A Kenwood system, from Sam's Club. What did I know? I hadn't really even started in A/V back then, and the speakers were... weak.
A few years later I bought some nice Def Tech speakers. I also bought a VERY nice A/V receiver. But, the receiver was taking four weeks to ship and I had the speakers, so why not hook them up to my Kenwood for the time being? WOW! The jump in audio quality from the cheap Kenwood speakers to the Def Tech speakers was well beyond night and day. The Def Tech speakers were more efficient and produced far more volume with much better sound quality out of the cheap A/V receiver. Bottom line was that better quality in the speakers is better quality all around and where your budget should go.
Oh... and that room is SCREAMING out for a projector! Seriously, that wall demands at least a 92" diagonal.
Put this in perspective, yeah, I have 8' ceilings in my basement... But I have a 161" diagonal down there. With the open joists, you can pretty easily fit a decent projector into the space. Drop a W1070 in there from BenQ and a 92" or 100" screen, and you'll have a home theater setup that is... well... home theater.