I think directly reducing the games' prices will not have the same effect as with traveling, since games are digital and non-mandatory goods, so less people will be swayed by reduced price; unless we are talking about 50% less, of course, which is why people use key reselling sites, because there it is noticeable (and people don't care about legality in that case).

That said, Epic is indirectly competing "on price" by paying publishers and developers for their store exclusivity, for free giveaways and even for just using Unreal Engine. But it's the price for developers, not customers. Tim Sweeney said multiple times that he thought supporting developers was more important than customers, and that customers would follow developers. I don't know how whether it worked though.

> The better question is why storefronts don't directly compete on price.

The way I see it, it depends how you see who is who's customer. Is the gamer the customer of the store, or are they the customer of the developer/publisher who put out the game, and in turn is the developer/publisher the customer of the store. The store cut is the price to buy their services, and they can shop around to find different offerings at different prices, just as gamers might be able to shop around and decide what (platform features) matters to them with the options available.