Why do they need to compete with Steam? Steam doesn't offer PS3 games.
I see your point, but the Steam summer and holiday sales have been very profitable, that's why they keep having them. They wouldn't keep having the sales if the developers weren't making money. I suppose in a sense they are competing for attention.
Let's say a person has both a PS3, and a PC. This person has let's say 50 dollars total to spend on the Steam and PSN summer sales. The game providers (Steam and PSN) compete for this person's money by offering deals to temp the gamer. The people at Steam want this guy to spend all his money on PC games. The people at Sony want him to spend all his money on PS3 games.
The gamer wants good deals on PC games, but he also wants good deals on PS3 games. It's up to him what games he buys, how he divides his money among the game providers. It's up to the game providers to try and get as much of that money as possible for themselves.
Capitalism, my dear Watson.
Been away for a bit, but sneaking back in.
Gaming on: PS4, PC, 3DS. Got a Switch! Mainly to play Smash