Using MacBook as an audio output mixer so I can combine external input and system audio into one common output source?

So my case such - I have a gaming console with an audio output and an M1 MacBook, and I want to be able to use built-in Macbook speakers as an audio output for external device (console) while also playing audio from MacOS.

AFAIK speakers and 3.5mm jack are considered different devices in MacOS, so maybe there is any software that allows mixing input from 3.5mm jack to the sound from built-in/bluetooth speakers (using simple aux cable)?

If there is no such programs, do you think it is theoretically possible to do something like this?

Routing input to output directly is not possible natively. You're going to need 3rd party software.

You will also get latency. You will also get the tinny sound of laptop speakers*. You will also quite likely have a headset socket which can only handle mono input [& designed for a cheap headset mic, not line-in].

I don't see it being a great idea, all in all.

Here's a QA with a list of the currently-available software for Mac that can do this. Mainly you get what you pay for - https://apple.stackexchange.com/questions/408600/capture-audio-correctly-while-capturing-video-calls-on-macbook-with-earbuds

The best of these apps [the Rogue Amoeba stuff] will cost more than a cheap set of speakers.

*I've never owned an Apple laptop but we have an M1 iMac here, with supposedly all-singing, all-dancing, Dolby Atmos, 6-channel yada yada… sounds about as good as a pair of $£€ 20 speakers from a supermarket/electrical retailer. I had to use one of those apps mentioned in the linked QA [SoundSource] to push an aggressive EQ curve into it to make it listenable.
(btw, I'm a sound engineer by trade. I'm picky;)