Regarding the hardware, are you deliberately ignoring Nintendo? They have low cost, cheap hardware, good margins, and are able to get a huge part of the market.
I agree on the need of a shift in product development, but the hardware isn’t what is lacking here.
This certainly has not always been the case. Nintendo lost money on consoles same as SEGA and everyone else.
There's the potential for the Apple TV to become a serious gaming platform in the future, but it would require a major shift in product strategy from Apple. That shift would have to include putting much more expensive hardware inside the Apple TV, increasing the BOM by more than the current retail price.