I see a lot of people using argument #2 and it's really short-sighted to treat acquisition the same as exclusivity deals. However much I don't like either, acquisitions are clearly worse. If you had to pick one, why would you wouldn't just leave it as case-by-case exclusivity deals?

Say, SquareEnix and Atlus are fully capable of releasing games for other consoles even with all the exclusives they release for Playstation. And nothing stopped Microsoft from waving a wad of cash their way to change their minds.

There is absolutely no way such a large acquisition will be better for competition. The publishers become unable to make their own platform decisions, no matter what benefits there are. You are losing sight of the market as a whole and the independence of studios by focusing exclusively on who gets the #1 console crown.