

Competition has failed. Repeatedly. The history of the post-industrial world is full of examples. There used to be a ton of competitive general stores in America before the Walton family destroyed them all. Competition is the most common way monopolies are created.
The problems the regulatory capture and the government’s lack of teeth. Which are issues for sure, but not ones solved by increasing competition.
I think that’s our fundamental misunderstanding here, because that’s not the regulatory solution I had in mind. I would look to other heavily regulated (or even nationalized) monopolies. Forcing Valve to split Steam up into either competing horizontal segments or disparate vertical segments would only make the service worse for the consumer AND the publishers (maybe you could make stronger arguments for some segments than others maybe hardware and game development could be split off from the store with little impact, but I don’t see the benefit there).
If you break the store up into competing units… Then what? Eventually one beats out the others and we are right back to where we started. Or worse, an equilibrium is reached between a small handful creating an oligopoly, like we see in so many other industries today.
Instead, I would leave Steam mostly as a single entity, subject to regulation about how it conducts business. From pricing to what it does with user data, to making sure that quasi competitors like Amazon, Xbox, PlayStation, and Nintendo are all able to have fair access to distribute their games on the platform too. Create a regulatory board in charge of effectively managing the monopoly.
This whole “just add more competition” has led to a dystopian capitalist hellscape. It doesn’t work for more than a couple decades before the government needs to step in anyways.