Raise the price from $199 to $399 or even $499, get some exclusive games and this thing will sell not only to the Apple fanatics but also gamers. Apple is getting into creative content, rumors say they'll have their own TV shows soon. They're increasingly spending more time on games in their premier reveal events, they had Mario there, Monument Valley, and thatgamecompany's new game Sky (and some AR game) was announced as a time exclusive yesterday to their platforms.
True, the margins are smaller on consoles, but Apple's will be higher than other platforms. They have superior supply chain. They don't need to outsource the most critical components: processors, their A series are the most powerful mobile chips and even rival low end macbooks, the new A11 Bionic chip is awesome (not gonna be surprised if macbooks move away from Intel in a few years). With a more high end version dedicated towards graphics (and without the motion and camera stuff), plus more ram it should match or supersede current gen consoles. Not to mention the subscriptions they will have, undoubtedly at a higher price than PSN/XBL, and which they could combine with Apple Music and original TV series, there will be enough money for them to make.
So hardware wise there won't be an issue, the design will be great. When it comes to software, they won't have trouble getting the best minds in the industry. They can snag a ton of people from Blizzard, Bungie, Rockstar etc to come work for them, hell with their money they can acquire the companies (personal wish: buy Sega and bring old IPs back). Get some independent studios to become 1st party, like Obsidian, IO or Remedy. People who have experience with consoles like J Allard can be brought in.
Apple dominates the smartphone, they have the tablet market, the smart watch, soon they'll go in the car business. The only thing left to conquer is the living room. If they're making original TV content and competing with Netflix, HBO and Amazon, there's no reason why they shouldn't make interactive content.