Gaming consoles are affordable platforms, and Apple is not doing that.

Then to actually have games, Apple would need to make stable tooling and convince developers to port games to their platform. And convince everyone that they will support it and not drop it.

Apple tried this, I forgot which year, there was a push to make the Apple TV a console. Arcade support, controller compatibility, it all shipped. You can plug in an Apple TV and pair an Xbox controller right now and play a surprisingly large number of AAA and indie games, from Resident Evil VIII to Slay the Spire. It was too little too late, though. Most games are played on phones, and the console market is falling apart. Microsoft seems to be pulling out, Sony is basically shipping locked-down gaming PCs with a couple of exclusive games. Nintendo is holding course more or less, but their main value propositions are simplicity and first-party exclusivity, and phones already ate the first half of that.

Developers need to optimize and debug their game for each console. Xbox/PS are completely different platforms (UWP vs heavily customized BSD) so fixes don't transfer over. Adding another incompatible target with new store guidelines and system APIs adds a lot of work so Apple would have a hard time convincing them.

Now add the perception that Mac users don't play games and Apple devices are made for people already in their ecosystem. The only way they could gain market share is competing with Steam Machine as a more open platform, but without a giant library of existing games.

I think this is a multifaceted problem: - Apple TVs as they currently are can run RetroArch and some other more demanding games just fine, though not at full 4K - Game engine developers (Unity, Unreal are most notable) work very hard to add optimization tools for mainline consoles, and Apple has only recently started to really bolster this with the GPTK (game porting toolkit) and more Metal/GPU focus - Ouya and other similar Android standalone boxes have been underpowered for years, and the AI hardware inflation will make this segment harder to get into

Google tried this with Stadia. I was a pretty happy user of it, but I think it probably exposed the weakness of US bandwidth/ throughput. Still trying to find what to do with the two controllers but it was the best refund experience I've gone through and Google probably regrets setting my expectations like that.

They’ll probably need to design new silicon that is much more GPU oriented (with less CPU) than anything they have in the A or even base M series to handle 4k gaming at sub-M Max prices

A console-optimized lower-priced higher-GPU variant of the A series could be useful for local AI in so many products that don’t come with a capable processor (eg homepods, TV, the monitor they put a whole iPhone chip in)

I could see something for around the price of a Mac Mini with a controller that’s og MacBook plastic white/black

Consoles come with a controller and enough storage to be usable for games. The largest Apple TV 4K is 128GB and it's really common for games to easily be 50+ GB or even considerably more. 100 GB is not even that uncommon anymore (e.g., Call of Duty, FF7 Rebirth, Baldur's Gate 3).

When Apple first launched the Apple TV game store they required games be playable with the horrible remote. Understandably even games that would have been fine on the hardware didn't bother and while Apple later relented and allowed games to require a controller it's still an extra purchase that's needed.

A pro device is going to be expensive. Non gamers won't buy it, let alone $60+ games.

A walled garden living room appliance that allows you to purchase a revokable digital license to download games only through the manufacturer's store?

Apple TV, PS and Xbox all meet that definition. I'm not following what you're pitching…

there is the steam machine but from my experience it is a matter of hardware drivers and support.

Steam Machine is GREAT. But it still has warts around controller support etc...

Also, a lot of AAA games do not work on steam machine because of aggressive anticheat and DRM, and those vendors don't provide Linux builds. No spyware, no game.

The software for the UI just isn't there for Windows machines. There have been attempts but it is always janky and you end up pulling out a keyboard anyway.

Devs are afraid of piracy so they like the walled garden. They don't want emulators running because then they have to compete with the 90s-2015 era which is the golden age of gaming, and their newer games don't stack up ( except in graphics ). Nintendo doesn't want to compete with Mario Kart Double Dash on the Switch 2.

Also: Modern PCs absolutely MOG the Switch 2 and Xbox. The games are all in the same engines and cross-platform anyway, so piracy ends up useful.