This is competition. This a huge competitive play. This is the thing that everyone always says is great for the gaming industry; "more competition". Microsoft just got a whole lot more competitive and now it's somehow "not healthy for the industry". I think it's good that Microsoft is putting their money where their mouth is. It's one thing to say "We're all about games"...it's another thing to put $7.5 Billion on the line to prove it. If Google or Apple want to make the same kind of play, I'd say "go for it". More competition is going to make for a better gaming landscape for everyone. Apple is not about to buy Ubisoft though. Don't kid yourself.
You're simplifying thing to a massive degree. "More competition" can mean many things, but the absolute worse form of it is a consolidation of established products from a large consumer market to a much smaller one. It just isn't healthy as it just takes the games away from people who would've 100% bought them, and this kind of practice will now surely just escalate. This isn't about proving anything.
I see many Xbox gamers here overjoyed, but what then when Sony or Google or Apple announces that they've bought some big third party publisher and now you have to buy their system to play the games. People aren't just going left and right buying all the consoles. An overwhelming majority only has one, that's it and it isn't going to change. How is this a good thing for consumers or makes gaming better for everyone? Having creative control in fewer hands is newer a good thing. I guess we'll have to wait until that day until most realise that this is just a really bad thing for consumers as a whole.
MS just spent 7.5B which doesn't really go towards making games better and just takes many established franchises away from millions of gamers. That money would've made wonders to gaming in general if it was spent to form new studios.