When Dictionary.com defines the living room as a room of leisure, its clear the online dictionary isn’t referring to the consumer electronics industry. Otherwise, the words “bloody battle to the death” would likely be included. With Circuit City going out of business, Toshiba retreating from a bruising loss to Blu-ray, and the Big Three of gaming throwing billion-dollar elbows, the room where consumers go for leisure is where upstarts and giants of technology go to die.

Even Apple knows this. After a decade in which nearly every move by the maker of the iPhone was golden, the company’s effort at a next-generation set-top in Apple TV stands as one of its few disappointments. The company set expectations going in, pitching the device as more “hobby” than “hit” from the get-go. But, two years after this “hobby” hit the market, it’s worth examining what Apple will do next in the living room.