Because of their steadfastness, Christians who are martyred, as well as the faithful who die naturally, are with the Lord when they die. They remain priests and participants of the kingdom upon death (20:4).
Note also, John sees “souls” (not bodies). He is not speaking about resurrection bodies fit for an earthly kingdom, but about our life with Christ upon death. Perhaps in using the word “souls”, he is saying he sees “persons” who are victorious. The other two occasions where the word “soul” is used to describe Christians, the saints are in Heaven (6:9-11 and 12:11; the NIV “lives” is the same Greek word translated “souls” elsewhere). They escaped from their dying bodies and ascended to God’s presence. The vision, then, relates not to glorified saints having their glorified bodies, but to those saints who are in the presence of Jesus upon their death.
The big picture is this:
Even though it appears as if Christians have been defeated upon their death, John assures all faithful believers that even though they die, they are resurrected to a more intimate life with Christ, something John identifies as “the first resurrection.” Each Christian experiences a reign with Christ, a reign symbolized by 1,000 years. John declares that upon death “they lived.”