The FTC of US & CMA of UK made Microsoft spend a ton of money to get that acquisition & tried very hard to block it. A US judge in California ruled the FTC had a bad case.
Microsoft & Activision merging only moved them to the 3rd largest studio. Also it has plenty of pro competition factors allowing them to compete against Sony & Nintendo. They also made deals with many other distributors about expanding their game reach via cloud services. Lastly it allowed them to acquire King. Microsoft would like to break into mobile gaming more & there is a very monopolistic walled garden ala Google & Apple.
Go after Microsoft for their monopolist tactics but this wasn't one.
We have seen this with of the merger challenges that have happened since Biden took office. Trump also tried to block a few, mainly out of his own ego from what I could see. (AT&T-Time Warner Deal specifically).
[1] https://www.ign.com/articles/ps5-has-outsold-xbox-series-x-a...