I have the base MacBook Air and I have a huge steam library. It's blowing me away on performance, but there will be periods that crop up randomly where it will throttle down - so I would say for non FPS sensitive titles, it's more than great, but I'm still testing. Last night it throttled, but I had been in the middle of downloading over 300GB of games and kept launching them in sequence after a download to test framerate. Right now I'm playing CIV VI at medium settings for an extended period on battery just to see how it holds up.
I will say this, outside of one old title, this M1 BASE MBA I have absolutely annihilates my Dell 9310 Iris Xe i5-1135G7 iGPU for every title I throw at it.
Here are some approx benchmark impressions:
Most all at medium/900P
Rise of the Tomb Raider (last game I tested last night) - 44.9FPS!
Civ VI - Gathering Storm Benchmarks at 25FPS
Total War: Warhammer II - battle benchmark was 31FPS, and about the same for campaign overworld map
XCOM 2 - no benchmark, but looks to be running at 30FPS
Cities Skylines seemed to run a huge city (over 100K) at over 30FPS at 1050P rez
Batman Arkham City GOTY ran at 45-60FPS - some frame drops, but played really well
Mad Max - not sure why, but this game runs great on my Dell, but could not get over 9FPS on this at 900P
These are all running through STEAM, not Mac App Store versions.