I did some testing to compare the Steam Link hardware vs the Steam Link app on an Apple TV 4K, with both devices wired.
Quality is noticeably improved on the ATV, even when streaming lower resolutions and using H.264 rather than HEVC. Bit-rates are consistently about 50% higher than using the Steam Link.
With a static scene in a 720p30 game for example -hardly anything demanding- what streamed at 12mbps to the Steam Link, streamed at 18mbps to the ATV - so it must be a difference in encoding settings that Steam uses for each device (both were configured to 50 mbps in the client options).
But image quality is still not great. It is particularly evident in Steam's BPM interface, but there is a lot of color banding in dark areas of the image - even using HEVC and "unlimited" bandwidth settings.
- Latency on the Steam Link is very consistently around 18ms, ranging from about 15-21ms, as reported by the device itself.
- Latency on the ATV was much more variable, with the average probably being lower (maybe 12ms) but ranging from about 8-21ms.
This latency was very noticeable to me on either device when using the Steam Controller as a mouse, but not too bad with a DualShock 4 in games that don't use a cursor.
That said, it's connected to an older TV which doesn't have the best latency for gaming - so it's likely that a lot of what I was noticing is caused by it.
The stream seemed more smooth on the Steam Link, with occasional stutters on the ATV.
With my Ubiquiti access points, even doing wireless on the Steam Link produces consistent stutter-free results.
Connecting a Steam Controller was a bit frustrating on the Apple TV, as it pairs via the app itself rather than Bluetooth settings, and wouldn't pair until I paired a DS4 first, for some reason.
Meanwhile the Steam Controller connects directly to the Link via the faster wireless protocol (rather than Bluetooth) and can also power up the device.
Ultimately, my opinion on streaming hasn't really changed much: it's a big compromise on image quality and latency and not something I'd ever use as the primary way of playing games.
More for occasional use or casual things like puzzle games, turn-based games, visual novels etc.
I must say that I'm having doubts over whether the Apple TV was the right device rather than an NVIDIA Shield Pro now though, as I've run into a few issues with media streaming (mostly with DVD playback quality, and ease of accessing my media library).