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Really stupid question here. I don't pretend to know a whole lot about the PS/Xbox universes but are we sure that Activision will stop releasing content on the PS5? I mean, Microsoft acquired Minecraft but the games still came to the Wii U and the Switch. Banjo Kazooie and Goldeneye (rumored) are also making appearances again on Nintendo consoles. For MS to ban Activision from releasing content on the PS5 when the PS5 comprises a huge chunk of yearly CoD sales seems like a questionable business decision even if MS and Sony are direct hardware competitors.

The only way that it would make sense for Microsoft to bar Activision from releasing games on the PS5 is if MS thinks that it can squeeze Sony out of the console market completely. I doubt that this will happen given how powerful the PS brand is. Even if Microsoft was in a position to do this, given that company's history with antitrust issues I am not sure that they would even want to try this given the public optics. It makes sense to me that Microsoft will still want to profit from the extremely large PS5 user base. I think that Microsoft will, at worst, continue to release the big titles on PS and XBox but hold back a few features for the XBox audience or maybe release COD a month earlier or something on XBox. I wouldn't see this as catastrophic for Sony or the PS5.

There is also the possibility of talent leaving Activision and forming new studios like what happened to Rare around the time that Microsoft bought it. Sony has a good relationship with third parties and not every top developer wants to work for a massive company like Microsoft. I am sure that Microsoft has been well advised not to shake things up too much with the acquisition.