Microsoft’s proposed $69 billion acquisition of gaming company Activision Blizzard received approval from Britain’s top antitrust watchdog on Friday, clearing the last significant barrier to the transaction’s completion.

The Competition and Markets Authority claimed that it had approved the acquisition of Activision by Microsoft, but without the inclusion of cloud gaming rights.

“The new deal will stop Microsoft from locking up competition in cloud gaming as this market takes off, preserving competitive prices and services for UK cloud gaming customers,” the regulatory body said in a statement on Friday.

The CMA was the last regulatory body to prevent the transaction. The deal should now be completed by Microsoft.

The CMA, the takeover’s strongest opponent, made a significant U-turn with this decision. Earlier this year, the CMA effectively banned the merger out of fear that it would limit competition in the embryonic cloud gaming market.

Activision was the subject of Microsoft’s initial acquisition proposal in January 2022, but the company has since run into legal issues in the U.S., Europe, and the U.K.

To ease its worries, the CMA declared in July that it would take into account a restructured acquisition from Microsoft. Microsoft made a number of concessions, the main one of which was to give French game maker Ubisoft Entertainment the cloud rights to Activision titles.

It will enable Ubisoft to make Activision content available through any commercial model, including multigame subscription services. Additionally, it will make it possible for cloud gaming providers to use Activision content on non-Windows operating systems, lowering costs and boosting productivity, according to the CMA.

The U-turn in UK regulation

Global regulators were worried that the acquisition will lessen competition in the gaming industry, particularly in the cloud gaming sector. The executives asserted that Microsoft could also make popular Activision games like Call of Duty exclusive to Xbox and other Microsoft platforms.

Cloud gaming is viewed as the next big thing in the market since it offers subscription services that let users stream games the same way they would Netflix movies or TV episodes. It might even make pricey consoles unnecessary because people could play games on their computers, smartphones, and televisions instead.

In particular, the U.K. regulator contended that approving the acquisition would give Microsoft a dominant position in the embryonic cloud gaming market when it rejected the transaction in April.

After Microsoft made concessions to the EU, the European Union’s authorities became the first significant regulatory body to approve the agreement in May.

The CMA noted at the time that it stood by its initial decision to oppose the deal because the compromises put out to the EU would give Microsoft the power to “set the terms and conditions for this market for the next ten years.”

In the meantime, the Federal Trade Commission was suing Microsoft in the US in an effort to stop the Activision acquisition. However, a judge disallowed the FTC’s attempt to do so in July, paving the path for the transaction to proceed in the United States.

Within a few hours, the CMA declared that it was “ready to consider any proposals from Microsoft to restructure the transaction” and satisfy the regulator’s worries.

In its second attempt to get the deal approved, Microsoft made concessions to the CMA in the month of August.

Activision’s current PC and console titles as well as any new games the company releases over the next 15 years won’t be covered by the reworked deal, which excludes Microsoft from acquiring cloud rights. According to the CMA, these rights will instead be transferred to Ubisoft Entertainment prior to Microsoft’s acquisition of Activision.

According to Sarah Cardell, CEO of the CMA, “we’ve ensured Microsoft can’t have a stranglehold over this important and rapidly developing market” with the sale of Activision’s cloud streaming rights to Ubisoft.

“This intervention will make sure that people have more competitive prices, better services, and more choice as cloud gaming expands. We achieved this result as the sole competition agency in the world.