If you're not familiar with virtual machines, they're basically a way to run a foreign operating system on your computer -- Windows or Linux on a Mac, for example. That makes it possible to do things like play PC games on a Mac or run old 32-bit Windows applications (which were deprecated a few versions of MacOS ago). Parallels is probably the most consumer-friendly VM software left, now that Apple booted Boot Camp for its own silicon and VMware's options are stalled in the Intel era. With Parallels Desktop 18, it's sidling up to the upcoming version of MacOS 13 (Ventura) with support for new features and enhancements to existing ones.
In addition to supporting Stage Manager virtual workspace in Ventura, there are a few updates in the new version that may make gaming a lot smoother. First, Parallels will now pass through Bluetooth connections for Xbox and PlayStation controllers from MacOS to Windows (or Linux), which should streamline operation; the company says it doesn't add any latency. It also reportedly delivers faster GPU operation on the higher core-count M1 chips, like the M1 Ultra.
Parallels also beefed up USB 3.0 handling, so you get smoother video with streaming capture devices and file operations for Intel-based applications. (Since Apple Silicon is based on Arm, not x86 like Intel and AMD, file operations can always benefit from some optimization).
Plus, the update adds support for automatic refresh rate synchronization between MacOS and Windows on ProMotion displays, though that's not the same as supporting adaptive refresh in a game.
There are also some enhancements for IT folks in the Pro version, including better deployment and provisioning tools that support VM image downloading based on credentials as well as SSO/SAML. And developers who use the Business version gain tools like network-condition simulations for testing, easier sandboxing for the VMs, the ability to boot a Linux VM from the network and more.