What? How does this lessen competition?
The PC gaming market is thriving thanks to Steam and indies.
Playstation is doing well. Switch is doing great.
Microsoft? Aside from providing Windows and DirectX, they're basically invisible. Xbox is just a cheap wannabe PC with no great games. It's a wonder they've supported it for this long. Maybe this acquisition gives them a fighting chance against Sony and Nintendo.
It's not like Activision and Blizzard are even particularly beloved, just pumping out endless sequels. They're steady but relatively soulless cash machines that don't really innovate anymore anyway.
Having Microsoft in control might improve their internal cultures, maybe make Blizzard games finally available on Steam, get more and Bethesda Xbox games on GeForce Now, etc. Maybe even make more games cross platform and with good controller support. Those all seem great. Meanwhile the real innovation will continue to come from indies while the behemoths just keep pumping out new graphics (which are often just Unreal anyway, which is again not Microsoft).
Microsoft is just too minor to be dominant in modern gaming, and Activision is a has-been that just keeps making filler titles. It's not some great loss to the industry. Now if someone acquired Valve, that would be a tragedy...