Sony has over 2:1 advantage wordwide, and 4:1 in Europe. For AAA publishers it would be better to have a stronger Xbox that offers more competition to Sony.
That would be a bigger market for them so they could sell more games, and also would pretty likely to have more opportunities of getting deals with platform holders and in better conditions.
It would be even better for Sony fanboys, because a Sony with stronger competition would work harder and bet harder so would deliver more and better games, hardware and services in terms of quality or pricing etc.
I mean, Take 2 would prefer to have two console makers for who is profitable to pay a huge amount of money for the GTA6 marketing. They would bid and Take 2 would get more money for the deal. But if that chunk of money is only worth it for only one of them then they'll get less money.
A separate topic would be what Take 2 or the big publishers think about the 'day one on GP/could gaming' strategy, pretty likely all of them are against it and putting their games there, but they understand that MS may want to do so.
So uh how about that "competition" for Nintendo in the portable/handheld space, then? You know, if MS being a stronger competitor is "needed" for Sony to do better, then shouldn't we want say Sony to come back to the portable/handheld space, or Sega or whomever, to make Nintendo do even better than they currently are?
Here's the truth: Sony does not "need" Microsoft in console gaming at all in order to want to do better. Their own shareholders will expect them to keep performing better with market performance, which naturally creates the need for Sony to keep delivering big games and work with 3P partners to do the same. Yes a stronger MS/Xbox would be a nice-to-have, but it's not a necessity whatsoever. And Nintendo's been putting out some of their best games ever on a system that has no natural competitor in the market, so the notion PlayStation "needs" Xbox around is hogwash.
I would like Xbox to become a better brand, and to get back to what made the OG Xbox and first half of the 360 great systems. But that doesn't in any way, shape, or form require buying up 3P publishers. We have zero idea how an ABK under MS would grow and prosper in terms of creativity, and MS's past acquisitions haven't exactly given a lot of hope (mostly) on that note. Nothing from Phil Spencer's mouth WRT ABK so far has shown he has any interest or inclination to actually get creative with legacy ABK IP outside of Guitar Hero, and that one was simply brought up because it was a huge cash cow in the '00s.
Take-Two are probably in support of the deal because it means less competition for them in the 3P market space. It means a likely reduction of total ABK game content output by volume, meaning less games Take-Two's offerings have to compete with. It also means they are even
more favorable in the eyes of Sony in terms of being a priority for marketing deals, exclusivity agreements etc. since there's one less 3P publisher they have to worry about.
Your idea that a more "competitive" MS by way of acquiring ABK would lead to them and Sony bidding higher on Take-Two games is also pretty flawed, because with an asset like ABK under their ownership MS have
less of a reason to seek out bidding wars for big 3P games. A MS with ABK ironically strengthens ties between Take-Two and Sony to where the latter is more likely to get deals, as Microsoft has less of a need for deals on Take-Two properties.
You should probably read the thoughts of Xbox France's ex-executive on Twitter;
@Dabaus has a post with the text and a link in case you're interested. They point out a lot of insights into the unfavorable market conditions Microsoft's current acquisition strategy paint and the element of fear in place for indie developers who rely on services like Game Pass to speak out. It is somewhat related to the rest of this topic, but I think it would help if you're more informed on how this aspect of "competition" you seem to either favor or be condoning of, isn't the net benefit to the market or even Microsoft you irrationally feel it is.