That's not really how businesses work. After Sony clowned Microsoft's Xbox last generation (their Godly "sharing games on PS4" video must have fucking stung) Microsoft was only too happy to sign a deal with Sony to help with their cloud infrastructure. You don't get to be a trillion-dollar company by holding grudges.
If the deal falls apart, and I seriously doubt that it will - if anyone knows how to close M&A, it's fucking Microsoft - their will some pretty sizeable fallout. Activision Blizzard's stock will tumble, and Kottick will likely be ousted. Microsoft's stock will also take a hit, because it's USD$70b purchase likely means its projected forecasts for Game Pass growth and gaming division revenue go out the window and they're back to square one on planning how to get Game Pass to 100 million subscribers.
What will be really interesting is what happens for Xbox if their plans are disrupted. With USD$70b allocated, I suspect Microsoft still invests elsewhere for Xbox. They might not get ABK, but that just means Nadella could go shopping to fill that revenue and adoption driver gap.