Eh they do have competition, from e.g. Epic and Battle.Net and what have you, it's just that their competition is public and universally worse off for it.

Their competition is beholden to quarterly reports, and can't do the sort of long term plays that would be needed to compete effectively with a company like Valve, which isn't beholden to quarterly reports.

Valve doesn't need to enshittify because they aren't subject to shareholders pressuring them increase the profit. As a private company that's pretty much printing money, they don't need to do anything... which has largely been their entire strategy. What would Gabe even do with even more profits, buy a third and fourth yacht?