If you had to pick one, why would you wouldn't just leave it as case-by-case exclusivity deals?
A case-by-case exclusivity deal for a big publisher like Activision is just exclusivity on about 4 franchises. Let's be real. They don't make much more than that these days, which is why those big publishers are looking to sell now that they've thoroughly un-diversified themselves. I don't get to pick which option Microsoft went with, but functionally, it's not any different.
There is absolutely no way such a large acquisition will be better for competition.
I don't know you, but there's a pretty good chance you own a PlayStation 5 and not an Xbox Series X/S. They play almost exactly the same games basically exactly as well as one another, but PS5 is running away with the market. There's no world where PS5 having so little competition from Xbox is good for anyone. We're closer to a world with zero consoles than we are to a world where another competitor can break into the market anyway, so I say burn down the way exclusives and consoles work in general (like their own little monopolies on their digital storefronts), but this will result in a more competitive console market than we have now.