You mean hardware supported codecs? According to the specs page [0] it's pretty much the same as an iPhone. Standard H.264 <= 60fps 1080p, regular MPEG-4, HE-AAC. The usual MP4 containers. Most of Apple's audio codecs. The most interesting thing is the HEVC support [1] but I'm not sure how useful that will be given the patent situation. There are also rumours [2] that the A8 can deal with 4K.
If you mean software decoding, I'm not sure what you have in mind. The more interesting codecs (VP9, Thor, Daala) are too complex to decode in software on such a low power embedded chip.
I was referring to software, as I figured the Apple embedded chips have gotten fairly beefy over the past few years and might be up to the task of software decoding. Thanks for the detailed response.
They might be able to deal with some of the older codecs like FLV or WMV but even many laptops struggle with codecs like VP8/9, with some users going so far as to use plugins [0] to disable them. I have a feeling you'd be hard pressed even getting something like 10-bit H.264 (common for anime releases) decoding in software.
Things like this have been attempted in the Raspberry Pi community but the last time I checked there was no success.
Good job finding the actual specs, I didn't bother to look, but it looks like I wasn't far off except in thinking that VP8 and MPEG2 MIGHT be supported. I'm surprised about the lack of H265/HEVC, even if it's not used much now it means that as things progress the ATV2 will end up being unable to support things in the future.
You don't have to. One of the main points of Plex is that the media server (the component running on your PC where the media files are) does Just-in-Time streaming transcoding. You keep your files in the source format; they're served to the AppleTV in a compatible format. You jump to 0:30:00 on the AppleTV; the transcoding process jumps to 0:30:00 in the source and renders+streams frames from there.
If you mean software decoding, I'm not sure what you have in mind. The more interesting codecs (VP9, Thor, Daala) are too complex to decode in software on such a low power embedded chip.
[0]: https://www.apple.com/tv/specs/ [1]: http://www.streamingmedia.com/Articles/News/Online-Video-New... [2]: http://www.slashgear.com/iphone-66-plus-a8-chip-capable-of-4...