At the very minimum,
3-year old Apple TV 4K should be spec bumped to A12X, HDMI 2.1, Wi-Fi 6, and 64/128GB storage.
A10X and HDMI 2.0 are fine for streaming apps, but they are showing age with Apple Arcade. A10X is a Nintendo Switch class processor, which is fine for 1080p but frame rates suffer on 4K. A12X is an Xbox One S class processor, which can upscale 1080p games to 4K without frame rate issue. HDMI 2.1 with ALLM and VRR (similar to proprietary G-Sync or FreeSync) will reduce judder and lag.
5-year old Apple TV HD should be bumped to A12, HDMI 2.1, Bluetooth 5, and Wi-Fi 6, but maybe bundled with $19 Apple Remote (updated with Bluetooth and design refresh) to achieve lower price point ($149 Apple TV HD - $59 Siri Remote + $19 Apple Remote = $109).
Other ideas from most likely to least likely:
- Less polarizing redesigned Siri Remote (new design is mentioned on iOS beta)
- Apple designed gaming controller
- Built-in microphone (instead on the remote)
- Soundbar form factor
- Built-in camera for indoor security and webcam