if there's competition for games

There isn't competition for games? Competition requires being better, not the only place to get something. If you're the only location to obtain a product, who are you competing against in terms of that product?

and more money for developers.

In almost all cases, the publishers are the ones signing these deals and are the ones getting more of the extra money. Beyond that, Epic's whole arrangement where they cover the difference in expected sales or outright pay for exclusivity means that publishers/developers can make lower quality products and not have their net income changed at all as long as they're able to sign with Epic.