If they were to break that contract they would have 2 options to do so, neither being particularly attractive.
1) They would have to buy out the contract from Sony, which would cost them more than it's worth.
2) They would be at the wrong end of an extremely expensive lawsuit for breach of contract.
The fact that the contract was in place before they bought the company is irrelevant. When they bought Activision/Blizzard they bought not only the company, but everything that comes with it. The games, the sexual harassment issues, and the previous contract with game developers. Among many other things. So their smartest move is to let the contract lapse, and decide from there whether it's a good move for them to reinstate a new deal, or keep the games to themselves. For those who prefer Xbox, and Xbox loyalists, this is no big deal. But for gamers who in general prefer a different platform, multi-platform gamers, or loyalists to a different platform, this could be an issue. And being that they spent damn near $70 billion just to acquire Activision/Blizzard, they can't afford either of those 2 options without facing possible bankruptcy. It's often sad to see a major corporation facing chapter 11. Or even worse, chapter 7.