Upcoming Apple TV Could Support 120Hz Refresh Rate According to tvOS 14.5 Beta Code
Apple is working on a new version of the Apple TV that's set to be released at some point in 2021, and the new set-top box that's coming could feature support 4K 120Hz video output.

Evidence of 120Hz support was found in the tvOS 14.5 beta code by 9to5Mac, with the code listing multiple instances of "120Hz and "supports120Hz." The code was found in PineBoard, Apple's name for the Apple TV interface.
The references to 120Hz refresh rate support suggest that Apple is testing this feature for the next-generation Apple TV, and it suggests that the new set-top box will use HDMI 2.1. HDMI 2.0, used for the current fifth-generation Apple TV 4K, is limited to 4K resolution at 60Hz. HDMI 2.1, however, is able to support streaming 4K content at 120Hz.
As with the 120Hz refresh rate on the iPad Pro models, a 120Hz refresh rate mode on Apple TV would allow for smoother performance on 120Hz television sets and would be ideal for gaming where there's a lot of quick action as you might find in shooting games.
There are 120Hz TVs on the market, which people generally buy for gaming purposes and use with the latest Xbox Series X and PlayStation 5 consoles, both of which support the HDMI 2.1 specification and can output 4K video at 120Hz.
We don't yet know when the next-generation Apple TV will launch, but rumors have suggested it will feature a faster processor and a redesigned remote. Some rumors also suggest that Apple is planning for an Apple TV that would offer a console-like gaming experience, and 4K 120Hz support would allow the Apple TV to better compete with the latest flagship gaming consoles.
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