Rumors seem to revolve around improving graphics for gaming. Along with that, it might make sense to improve the remote for gaming, or support more controllers.
A12X really improves the graphics for gaming. (The A12X must be way ahead of PS3 style graphics by now? And approaching the PS4? That's not bad for such a tiny ATV device.) Making 'mainstream' games more sumptuous and ambitious.
They could make their own gaming controller and improve the TV remote.
Azrael.
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I’m not a home theater nerd so current hardware is fine. I think nothing major will happen until a major change happens in TV tech. If anything needs to change it’s hardware for Arcade. Some games are just plain sluggish on the tv 4K. The only real change I want has more to do with HomePod than tv. I just want them to work better together. Hell I would buy HomePod sound bar.
Games are always pushing the hardware and making new demands. So an A12X makes perfect sense to give developers for the Apple Arcade more reach, more ambition and to push the Apple Arcade ecosystem with more compelling content. It will allow the juiciest iPad and iPhone games to come across to the ATV also.
Arcade has had a decent start but the hardware will allow more impressive titles to allow more 'buy in' to the ATV eco system. Arcade is Apple out sourcing games development to 3rd party studios rather than bringing games in house to Apple...brandishing cash, marketing and prestige as an incentive. This service has room to blossom...and to add exclusives and killer titles. Apple are sitting on a mountain of cash. I'd quite like the idea of luring Bungie back to the 'Mac' platform (I consider phones, pads, ATVs, watches as all 'Macs'...) Be interesting to see what Bungie could do for the Apple Arcade.
ATV. Steel Controller (could there be an Apple branded one soon?) Apple Arcade. Home Pod.
There's an ATV eco system there. It could stand some improvement. *Looks* at the ATV hardware 1st.
It's important that the hardware remains (relatively) up to date with PS5/XBox updates on the horizon and the 'Switch' amongst other devices (Roku, Amazon) jostling for position in the massive TV home market.
Azrael.