There's two distinct layers of competition here, and I think Supergiant are being somewhat disingenuous (or I'm willing to give them naive as an alternative; this is not a trivial economic matter) to conflate the two and regard them both as one.
There's the competition between storefronts to secure product to release on that storefront. The owner of the product is equivalent to the consumer here, and the competition here is absolutely beneficial to them - and it's a form of competition that prior to now had been fairly low-aggression. Epic's introduction was an aggressive step into a fairly relaxed battleground, and that aggression has proven beneficial to the product owners who were targetted with it.
There's also the competition between storefronts to advertise to consumers as being the place to purchase a given product, with the consumers being the beneficiary of their aggression with each other. This tends to have brief moments of aggression over sale periods, relaxing somewhat in off-periods.
The problem is that the way Epic have approached this has resulted in something of a zero-sum game; the former competition has come about at the expense of the latter competition; the balance of power in Epic's model has shifted a bit towards the product owner at the expense of the consumer.
So I think it's disingenuous to blanket everything with an "It's competition, and competition is good!". There's more nuance to it than that.
Now, it has to be said, all that does come with a caveat, and it's not insignificant; it may actually be the case that the balance of power currently is already tipped to the consumer to a dangerous degree, and this is redressing the balance somewhat. I can see arguments for that - the race-to-the-bottom mentality is distressing, certainly, and yes, the industry may benefit from a bit more care and control of perception of values and price, but on the other hand digital has blown up on PC because it's an environment that's often tipped towards the consumer, and eroding that may in itself not be healthy. I'm intrigued by the Epic experiment because of all this.
But yes, ultimately: If you do want to think of it as a single layer of competition, think of it as competition between consumers and product owners to get the best deal out of storefronts. Is that competition good?
