Your app uniquely competes against other games in its category only when users are browsing in "categories". Unfortunately Apple does not release browsing data for users that interact with the app store app, however there are many more sources for potential users to find out about your game:

This means getting your game installed on someones phone and occupying their precious playing time is a lot harder than winning the category race. Here's a breakdown of what kinds of games your players may also enjoy (these will be in-direct competitors).

If you're building an arcade game, these users will also play Mgmt/Sims and Quiz games, be aware of this when you position your game on app store.