The He-man universe is has basically 3 groups to consider: The Masters of the Universe, Skeletor's minions (ie: The Council of Evil), and the side characters and races. The side races are those races of beings that we see every once and a while, they usually have unique attributes but I will just generalize them. The unique attributes are usually just things like bat wings or club-like tails. The Gargoyles universe has the remaining Gargoyle clans, Xanathos' steel clan robots and mercenaries, The New Olympians, Oberon's children, The Hunters, The Pack, The Mutates and Clones, Demona and Macbeth, Halsien Renard, The Archmage, the Quarrymen, and whatever else I am forgetting. The Gargoyles universe is full of little groups like these.
The He-man universe's various races outnumber the combined forces of the Gargoyles universe, but the forces from the Gargoyles universe are more powerful than the races. The steel clan, Gargoyles clans, Hunters, The Pack, Demona and Macbeth, and New Olympians will battle these races. They should be equal in power. The races are just filler in this battle, the real consideration is on the M of U and C of E. The major players of the Gargoyle universe are the Archmage and Oberon's children. There are many children, but only a few have appeared in more than one episode and therefore they will have to either fight alone or stand as a example of the power level that we can expect from them. The children that have appeared more than once are Odin, Banshee, Titania, Puck, and The Weird Sisters. The major players from the He-man universe are He-man, Skeletor, Cyclone, Evilyn, Evil Seed, Mossman, The Sorceress, and Zodac. These are the characters that will make the difference for each universe. Of the high powered characters from the He-man universe mentioned above, only Skeletor, Evilyn, The Sorceress, and Zodac are a match for Oberon or any of his children. Although we have never seen the Sorceress do much more than put up a force field around Castle Greyskull and maybe a few small blasts. Zodac has only done a few things as well. So it wil be Skeletor, Evilyn and the plant based guys vs. Gods. Odin is more powerful than Evil Seed or Mossman. Evilyn is more than a match for Banshee. Oberon is, however, much more powerful than Skeletor. Oberon is powerful enough to beat Skeletor and then move on to Evilyn and the rst of the forces from the He-man universe. Something to remember is that there are many of Oberon's children, so the few high powered beings from the He-man universe will have to take on many beings as powerful as Odin. The point I'm trying to make is that although skeletor is very powerful, there is an entire race of beings more powerful than him in the Gargoyles universe. I forgot to mention the Archmage, he will kick serious ass as well. The rest of Oberon's children will clean out the rest of the He-man universe's forces.
Like I usually say about the Stargate universe, the Gargoyles universe has great continuity (the best I have seen outside of a comic book). My rules preclude the use of characters that have only appeared once, but this level of continuity makes me think that we can at least think considered them a little. The rest of Oberon's children that have appeared are what I wish to consider, as well as the international heroes. Those characters are Anasi, Coyote, Raven, Grandmother, and Anubis. There are probably more but I can't remember them right now. These guys are still a match for any of the high powered beings from the He-man universe. I wish to mentioned the international heroes only so that we have someone to take on the rest of the M of U and C of E. The heroes are The descendant of Rabbi Loeb and his Golem, Cu Chalinn, and Nick the hero that village in Vancouver. To conclude, Oberon's children are more powerful and outnumber the strongest and most powerful characters from the He-man universe.
Winner: The Gargoyles Universe