Is it even possible for an American company to acquire a Japanese company? I thought Japan had strict rules about this kind of thing

One company owning, or trying to own, every business or studio in an industry is literally never a successful and positive thing. It will create a monopolistic vacuum that will ultimately destroy the quality of video games and drive the retail price up as Microsoft tries to leach as much money out of the industry as possible with the least amount of effort. Competition is absolutely critical to prevent this inevitable outcome.

I think it will if they continue being aggressive about it. Every company loves money and Microsoft can give them a lot of money. There's no doubt in my mind that they will attempt to gobble up companies as fast as they can. It's pretty sad that Xbox runs their company so awful that the only way they can compete is by just deleting 3rd parties.

I imagine that after the Activision ordeal, there's no shot the legislative bodies in charge will allow them to keep picking up studios like a grocery list.

Phil Spencer has said on multiple occasions that they want a Japanese developer though, so I certainly expect them to keep trying for one. I imagine they'd really like to get Square Enix to end the stranglehold Sony has over Final Fantasy and similar, or get From Software for that sweet brand name Dark Souls, but good luck justifying either one to an already pissed-off CMA or FTC.