This should not be a game in which if XXI succeeds Strategy loses, on the contrary, the more people buy bitcoin the more we benefit the rest, and in this case it is the same, the more companies buy bitcoin the more Strategy benefits and everyone who has bitcoin.
I have doubts it's so simple, but I may be wrong on this.
My understanding is: Strategy is benefitting currently that it caters to a market of -- primarily institutional -- investors who want exposure to Bitcoin but has no other means to invest in it as they need fixed-income financial products. This market has limited demand, as all other potential investors can get exposure cheaper by 1) buying BTC, or 2) even by buying ETFs and leveraged ETF products.
If this market now gets a new player, assuming the demand for these financial products stays the same, the demand for MSTR should weaken at least a little bit. This would lead into the premium erode over time. While this also makes the MSTR product less risky it also reduces its volatility, and volatility is one of the primary ingredients of MSTR-style business models due to the importance of "gamma trading" (see
this FT article). In general it could make MSTR's product less attractive over time, which may eventually lead to decreasing income of the company.
Of course it is possible that the appearance of a second big competitor could also lead to more demand for their products, and thus indirectly for BTC, because those who doubt get a "confirmation" that this business model is viable, as @Popkon6 wrote, and also because of their initially more beneficial terms for investors. I also think that one single competitor more (in this case XXI) would probably not put the MSTR model in danger. But anyway I think the demand for these products is still limited because of ETFs and BTC itself as "competitors", and it may be difficult to accomodate more players without harming the business model.
Am I understanding something wrong? I had also discussions in the Spanish forum about a related issue.