I mean niche in audience and reach. Estimates have it that there are 2 billion gamers and I'm sure that almost every human listens to music.
Well aside from the fact that the word niche really shouldn't ever be applied to anything with an audience in the billions, I still don't think you can really argue that the gaming industry that much smaller than the music industry. I mean, do the biggest games not compete with the biggest songs/artists in terms of audience numbers? GTAV has sold what, 120m + now? Does that not compete (or even better) the best selling songs/albums of all time? Do the views that game or something like Fortnite get on the likes of Twitch/Youtube not compete with the number of streams that the most popular songs get? (I have no idea on that one since I have no interest in streaming whatsoever, but you do so maybe you know).
Plus you really shouldn't assume that every, or nearly every, person listens to music. I personally never listened to any music (willingly/intentionally at least) prior to the age of 20.