You are right that as of right now the M1 can't really replace a gaming PC, but I don't see Apple currently really targeting that. However the real question is

You are right that as of right now the M1 can't really replace a gaming PC, but I don't see Apple currently really targeting that. However the real question is if that is an issue with the M1 chip or just an issue of Mac not really having much of the gaming marketshare. That being said, personally I believe the gaming PC market is largely a niche market for the entire PC market. At its core I don't see any reason the M1 chip can't play games (in fact we are seeing some good numbers come out of games that have a proper migration), it is purely a software issue. It may not be able to compete with the top of the line custom built desktops, but the reality other gaming laptops that are far more expensive can't either.