You are misreading what i am saying. I never said zero competition. Sony competes with Nintendo, PC and Mobile to sell PS5s. Steam competes with Windows Store and Apple Store etc. There will always be someone competing. If you dont trust the company you support than stop supporting them.
They all want money however its how they earn your money is the important part of all this. Steam basically had a PC monopoly for many years and it thrived as one of the best values in gaming for so long, before EGS existed. EGS isnt earning your money by offering a better platform, they are moneyhatting to force consumers over. Big difference and is not needed. But if you like your PC library chopped up on many different store fronts, than thats your preference, not mine.
How does MS compete with no Hardware? Lets see.
PCs, Mobiles, Tablets, TV streaming etc. They are already trying to implement GP on UHD TVs so you can play games directly off your TV. Selling 50m consoles is nothing compared to the PC, Mobile, TV market. Its an extra expense having console hardware when they can go full digital/Streaming. .
So there is your answer.
So it comes down to, do you need to spend hundreds on a console that will be dated in years time or just gain access to the games already on your current devices like your home TV.
So your first paragraph is something you need to think about. If you do not trust the company you are supporting, than stop supporting them. That is a great line if you have options. In your scenarios, if I do not like Sony or trust Sony, with the absences of MS who do I go to Nintendo. That would mean I would have to skip all the high end console games because the majority cannot be played on Nintendo system. Do I go to PC, not all console games make it to the PC platform. The question is never about if I trust a company, the question is that the market with competition gives options when a company breaks that trust.
You continue to act as if Valve will never break your trust but its not always about trust of the consumer. There are other dynamics to this than just the consumer. There is also the developers and other vendors that uses Steam. Without competition, Valve can always set whatever price they want. They can raise prices and always seek to maximize profit over everyone else. Currently Valve is not public traded company but who knows if that will remain as such. If they do, then they have to answer to investors and the scope and dynamics of the company could change. Any change in leadership can cause policy issues to change. There is never a guarantee that what you believe Valve is today, will remain that way. On another note, because Valve has been a digital monopoly for years, they have never needed to change their licensing structure. So they can always charge 30% cut on game sales which mind you is something you do not feel but you can believe other companies do. Now with MS store offering less of a cut including ESG, if those store front gain any traction over Steam, Valve will have to respond. This dynamic in the market just seems to ignore because you like steam but that is not how any market works.
MS already sell their games on PC. Gamepass can already be used on mobile. TV streaming is no better than steaming on Xbox which no one really uses today. Basically you are giving examples that MS already have in the market that has not elevated MS overall sales today but somehow these specific points is going to elevate MS now. This is the part that does not make sense. Its as if you are offering something MS doesn't already do today as a solution to tomorrow when those options today isn't bringing in the subs. Then magically because MS get rid of their hardware, those same options they do today will just increase 10 folds.
I do not know about you but I have a gigbit internet connection and even I do not use XCloud because while its ok for some games, its no where near what it needs to be for any fast pace game. Even still, if you have multiple people in your home playing music, playing MP games, watching TV all that eats up your net connection. Your solution only will actually be good for a very limited amount of people in the US alone compared to around the world. SO just from my experience with XCloud before I had a fat pipe to when I did not, naw, streaming is a ways off. One last point on streaming is data caps. So a lot of US providers have those data caps which means once you go over that limit you get charged more. If you want a no data cap net, you have to pay something north of 150 bucks. Most households cannot pony up that kind of dough.