I think it depends on what one would consider a "failure".
While I am an ATV fan, and have been a user of the ATV since the 1st gen, I have been disappointed in the lack of attention Apple gives the ATV.
Apple hardly ever advertises it, and it is barely a mention at their events.
I have no data backing this up, but I think outside of techies, hardly any normies know what the Apple TV even is. They know what a Roku is, they know what a Fire Stick is, and they know what Apple TV+ is, but most do not know what the Apple TV hardware is.
This is Apple fault.
I like the Apple TV HW, and I like tvOS, but the third party support for apps is lacking. The few gaming developers that tried supporting tvOS started to drop it like crazy a few years back. It doesn't help that Apple doesn't give a lot of support to the developers, either.
What used to be one of the best, and most popular games on tvOS, RISK, the developer dropped support for it last summer. This was a big let down for me.
Now, when it comes to the competition, the ATV HW is much better and more powerful than the competition. Actually, (unless things have changed in 2022) the older A10X in the ATV4K1 was still more powerful than any of the chips in the competing streaming boxes.
The problem with that is that a streaming box doesn't really need a lot of power, if it is just a streaming box. The much cheaper streaming devices, while not as powerful, can basically do the same job as the ATV4k, at least when it comes to streaming apps.
I honestly wouldn't be surprised if Apple discontinues the Apple TV. I would be sad, but not surprised.