Hello,
These things are good to ponder about the state of the industry. Any successful game developer has been thinking about his or her role in it.
If the game is fun to play and people are repeat users, then the game is a success! Getting people to try the game is one of the main objectives and critical to profitability.
The number of games in the market is mostly irrelevant. I'll tell you why.
Superior game developers who have fun games rely on market research and experience to seal the deal. Make no mistake! Those who combine these things go where most game devs don't.
The number of rivals makes no difference to those who learn market savvy. It is like stone age opponents competing against hunters with rifles. One hunter with a rifle is a match for many who depend on stones thrown at the prey.
In game development circles, over 99% of developers will see modest success at best. Actually the more games in the market then the larger the talent pool from which a leader can build a skillful team. It is an advantage to the brilliant thinking developer to have larger numbers of competition because such game dev is a mass of gravity which attracts more good things from a larger field. The competition actually can be used to help drive traffic to your game in the form of various media outlets which are more readily available because of the huge numbers.
Think of the competition as helping to create more opportunity for you.
Clinton