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The upside for you is that if you have a watch app and your competitor doesn't, customers are going to choose your product over theirs.

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That is what in theory you think happens. What actually happens is that in very few app categories that is the case. For example, not a single game is losing market share to a competitor because they do not have a watch app.

You picked the worst example here: you really can't play (serious) games on your watch, so the comparison is invalid. But for a fitness app, or a messaging one, or a music service, I would significantly favor the service that has a watch counterpart, if not shun the other one outright.

I picked the biggest category of apps just to show you having a watch app is irrelevant when picking an iPhone app for everything in the app store but a very narrow set of categories, and you just demonstrated that. Yes, fitness is great, messaging somewhat ok, but what about the other millions of apps in the app store? what about a writing app? or a video editor? or a measuring app? or Dropbox?

Right now there is no reason for Youtube to make a watch app, and no reason for you to pick Vimeo over Youtube because it has a watch app.

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