Xbox Series S is competing with Apple TV 4K
The Apple TV 4K is a great device at a good value. ($149 or $129 for the model without an Ethernet port, which I do not advise for purchase). It is primarily a streaming device for multiple apps for streaming shows and movies in 4K. You can also purchase movies and shows in the Apple store for viewing on the device. You can also play games on the device via the Apple Arcade subscription. You can even use an Xbox or PlayStation Bluetooth controller with the Apple 4K. In essence, it is a streaming device that also plays some games.
The Xbox Series S, when on sale, is very competitive with Apple TV 4K. I have commonly seen the Xbox Series S on sale for $250 for the holidays. Some places have it even cheaper at $199 or sell it for $250 with a bonus (like a free gaming headset or store gift card).
The Xbox Series S can stream all of the content that Apple 4K can stream (including Apple TV+ which is Apple’s own streaming service, and Apple Music). The big difference here is that at the $250 sale price, you also get a wireless Xbox controller, which the standard model retails for about $70 when not on sale. If Xbox really wanted to get competitive, they could sell the Xbox Series S without the controller and sell it even cheaper.
The other big difference is that the Xbox Series S has access to a far greater library of games spanning 4 generations of consoles via Backwards Compatibility (which in addition to Xbox Series S games, includes almost all digital Xbox One games except those made for Kinect for Xbox One, a very large portion of Xbox 360 digital games, and a decent smattering of Original Xbox games now available digitally).
Things could equal out a bit if Xbox Game Pass ever came to Apple TV. But if you want a streaming device, and even only have a slight interest in gaming, the Xbox Series S is the vastly superior option for the money. Apple recognizes this, which is why the 4K TV sells for as low as $129 (again, spend the extra $20 and get the model with the Ethernet port, you can thank me later).
I suspect that Apple may have some plans to add full console-quality games in the future (as opposed to the designed primarily for mobile/tablet approach that they have now) as the Apple TV 4K gets more potent over time. This would be relatively simple if they put an M1 chip in the device. This would allow them to do some ports for games designed for Mac computers. Capcom released a video earlier this year regarding porting Resident Evil Village to the M1/M2 chipsets, so hope springs eternal that games like this will eventually show up on Apple TV 4K. If so, at a $129 starting price, it is Xbox that will have to watch its back more closely. Heck at those prices, you could get both the Xbox Series S and an Apple 4K TV and still be cheaper than the all-digital PlayStation 5!