Killzone was objectively trash and I'm glad Guerilla moved on to make the highly successful and popular Horizon games.
Also, Killzone was made as a response to Halo. Now that Halo is largely irrelevant, there is no reason to revive Killzone. What Sony should be doing if MSFT-ATVI actually goes through is starting to acquire a large number of studios themselves. The only solution Sony has is Mutually Assured Destruction, if MSFT decides to deny CoD to Playstation in 10 years, Sony will make everything from studios they own exclusive in retaliation.
Sony really needs to break the bank and try to acquire EA. If CoD goes Xbox exclusive, then FIFA and Madden go Playstation exclusive. Sony's only path to survival is MAD like the Cold War. Like....Call of Duty Black Ops Cold War.
I don't think Sony needs to go to town if MS acquires ABK. Acquiring thousands of employees can create a negative ripple effect on quality. It can also lead to increased expenses and a potentially negative ROI.
I think more strategic moves would be preferred by Sony. For example, acquiring Capcom. They are leaner, have multiplatform IPs like Resident Evil, DMC, Monster Hunter that, if taken off from Xbox, will help Sony. And Sony already has SquareEnix games exclusive, so buying them wouldn't really matter in this context.
Most of all, I think Sony will have to make one nuclear move: make GTA 6 a full PS5/PC exclusive. If Xbox Series X|S is without GTA throughout this generation, it would nullify any impact ABK might have had. And it'd have a huge impact on next-gen console sales as well, as some Xbox fans might buy a PS6, thinking what if GTA 7 doesn't release on Xbox again.
That's all Sony needs in my opinion.
P.S. Before everybody starts attacking me, I'm against this kind of stuff. That's why my hope is that the MS/ABK acquisition falls through, and Sony doesn't feel the need to do stuff like this. And all multiplatform games continue to release on all consoles, creating equal opportunities for both companies, consoles, and their userbase.