I think you're underestimating the difficulty of taking on the incumbents in this space. Apple has already struggled a lot with Apple Music, and music is an area where they once dominated. Video games outside of mobile phones are an area where they have little to no experience.

At most, the Apple TV will encroach on the $5 downloadable games on PSN or Xbox Live. It's not going to be able to run any AAA titles.

Apple would have basically two choices:

• Make Apple TV basically a game console and probably more than double the price. It's not impossible to make this work, but it would require vast amounts of money to be dumped into the project to get it off the ground. The new console would need to run all cross-platform AAA games, and then Apple would need to get console exclusives good enough to convince people to buy it over a PS4 or Xbox One. They'd probably also need something like VR to really make it a success -- and Apple has absolutely no investment or involvement in that, so that's very unlikely. In short, it's not impossible, but it would cost them billions, it would take years for it to materialize as any sort of success, it would require some luck, and they likely couldn't bring much innovation to the space anyway.

• They could actually ship gaming-capable Macs with high-end discrete GPUs and make Apple TV into something like Steam Link with an Apple controller. This actually seems like a much more realistic plan for them to pursue, and I think they'd have some chance of success... except for the little detail that most AAA games aren't compatible with OS X. Which means Apple would be selling a product that basically requires you to dual boot Windows. I'm not sure I see them doing that.

Maybe you can think of some other approaches they could take to this space, but there's no way the current-gen Apple TV is going to encroach on the PS4 or Xbox One.