Apple designs and sells hardware, but it could be argued they are fundamentally a services provider. The iPhone is a slick device, but IMO its success is based on the many things you can do with it. If I were creating a next gen ATV, I'd be looking at expanding it's use cases. Otherwise, as others have noted, what's the point of upgrading from the current model?
If it was up to me, I'd want to leverage iOS and the already developed and deployed multi-lens camera/Lidar combo on the newer phones/pads. Either add the camera array to the ATV for positioning below/above/beside the display or create a phone dock and use it's camera array. This would support video conferencing from the sofa with a big enough screen to show larger groups. It would support Kinect-like scanning/tracking of people and objects for interactive applications.
The low hanging fruit is certainly gaming - like the Xbox/Kinect games - but in addition to a point cloud, you would have live video. For starters, the emerging universe of Virtual, Augmented and Mixed Reality technology would be enabled on a level currently only possible in specialized settings/labs. With a little time and imagination...
In the near term I'd plunk down $200 for an 8K ATV with a USB-C port for adding storage, but would such a thing sell enough units to be worth Apple's time?