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Amazon's previous VP of Prime Gaming said they "tried everything" to disrupt Steam
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this post was submitted on 19 Feb 2025
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The problem with a lack of competition is you end up in a "my way or the highway" scenario, both for the customers and suppliers, with the distributor having, functionally, complete control over who gets to sell what to who, and who gets to buy what. So you really are saying "In GabeN we trust" and "I have faith in Valve to conduct business fairly as a monopoly in the long-term" as you have no other option.
I'd say you're partially correct when you say regulation is the amswer, but with only a single entity, or even just a small number, in the field regulatory capture becomes a real risk. This can be overcone either by a legeslative with principals and a backbone (good luck, especially considering that needs to be maintained in perpetuity) or by having enough entities with different goals that no one of them can't dominate.
Ultimately you need a combination of robust regulation and enough competition that there is presure for them to play fair.