I don't see the FTC allowing the acquisition of Nintendo. Studios are one thing, but that's the acquisition of a whole competitor in the field with its own hardware, platforms, and ecosystem. That would literally be reducing competition and choice. In a field where 3 have beeen competitive for nearly 25 years, disrupting that would be detrimental IMO.
It's not like Nintendo is in danger of imminent failure and needs to be acquired. This is MS trying to save its bacon due to its own missteps.
Too many exclusives will probably end up causing damage to everyone. A few on each brings people to the platform, but I don't think many will spring for both a PS5 AND an Xbox. Nintendo's in a unique position that it's priced well enough that people will buy it as a secondary platform. It's portable, and has familiar and unique IP people are willing to pay for.
I have a PS5, but anything I want to play that MS offers, like Starfield, I play on the PC. They're probably their own worst competitior there.