That's obviously not in the same league. The gaming capabilities of Apple TV are still pretty much an afterthought. The games available are more likely to be ports from smartphones, not Xbox/PS platforms. The processing power is a small fraction of what a video game console or gaming PC requires, which is why Apple can use leftover old smartphone SoCs instead of having to invest in actual high-end chips for the device.
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.
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.
It has a controller that looks like a console gamepad and is one of the target platform of Apple Arcade.