Yes, total market dominance with 10% market share.
That is true, but I think it is debatable whether that is a reasonable way to define "market".
It would be as if a vendor wanted to sell their goods in a grocery store. The grocery store says no for some reason. The vendor disagrees and sues them, saying they have a monopoly on all grocery store sales on that particular corner.
"Wait, but there is a grocery store across the street?"
Well, in their law suite they defined market to be just that corner---they excluded the other corner where the Android grocery store is selling things.
[1] https://cdn2.unrealengine.com/apple-complaint-734589783.pdf
But once you have dominance different rules apply.
Ideally, I'd prefer that this kind of back-and-forth between developers and Apple would happen strictly through negotiation, rather than invoking the court system, but I realize that not all markets are functioning well enough for this to be practical.
It certainly can be argued that they have a dominant position in a particular narrow market, and the court will look at these arguments and determine whether they do or not.
Not sure what's the business model behind Apple Arcade, but it looks Apple is in a way also competing on the gaming market. From this point of view their 30% cut from competitors' sales looks a bit worse.