Not if it solely results in fragmentation. Having the choice between Ubisoft Connect, EA Origin, Steam and Battle.net isn't a "choice", it's just 4 different storefronts for me to manage credentials for.
There are always pros and cons.
Music streaming is a different ball game altogether; I have an actual choice here between Spotify and other providers. Yes there are some exclusives but for the most part I'm choosing based on the features they provide, brand loyalty, price, etc.
Games consoles are somewhere in between (largely due to the methods of funding video games) - you choose between Xbox or playstation (or Nintendo I guess) and get access to a wide range of games on your platform. Yes there are some exclusives (most of which are funded by the console maker and just wouldn't exist if it weren't for this), but by and large your choice is dictated "where are my friends", gamepass, price of console + services, brand loyalty.
This is going to end up like origin vs uplay vs battle.net, where you don't have a "choice" on where you play because there's no overlap, you just have to have axcpunts with them all and deal with all their individual crap, and shitty practices rather than just Apples
It's sometimes a win for customers.
[EDIT] trivial and clear illustrative case that should be easy to apply to murkier situations: a regulation that bans known poisons in food reduces choice.
[EDIT EDIT] more relevantly, and a bit tangentially to the example above: thanks to coordination problems it's possible for more-desirable states to be unmaintainable without reduction of choice—it's possible for someone's—even everyone's—favorite outcome to require a reduction of choice, and for that option to cease to be when more degrees of freedom are introduced.