Who exactly do you think the CEO of Microsoft Gaming reports to? This is a pretty common corporate structure. I've worked under a total of 4 CEOs in a hierarchy before (CEO of an investment firm reports to CEO of the owning bank's European investment division reports to CEO of Europe reports to actual CEO).

CEO within CEO is for separate Business Units or divisions, which is clearly not the case here.

How is Activision Blizzard not a business unit?

It probably isnt and it should become an integral part of Microsoft Gaming within 3-6 months. There is nothing dramatically different between it and other gaming projects/units in MS Gaming. This is not a large enterprise acquiring a startup and letting them run independently.

Go ahead, name a country that doesn't have two presidents. A boat that sets sail without two captains.