Sure, but it would eat a non-zero amount of Xbox One sales. Presumably that's why Microsoft isn't about to do it.

That's certainly what I was getting at. An AppleTV doesn't take away from sales of any other Apple product (that I know of). Whereas this theoretical product might take away from Xbox one sales (which they target as a TV + multimedia + gaming system).

Wouldn't that have been a concern these last two and a half years anyways?