UK drops console concern over Microsoft-Activision deal

LONDON (Reuters) -Britain's competition regulator said Microsoft's 69-billion purchase of "Call of Duty" maker Activision Blizzard would not harm competition in gaming consoles, removing a major obstacle to the deal.

In findings based on new evidence, the Competition and Markets Authority said on Friday that it would not make financial sense for Microsoft to make "Call of Duty" exclusive to its Xbox console, and it would instead still have the incentive to continue to make the game available on PlayStation.

The regulator, however, said it was still looking at the impact of the deal on the cloud gaming market.

The takeover, the biggest ever in gaming, remains subject to the scrutiny of regulators in the United States and Europe.

The CMA had noted Activision's flagship "Call of Duty" franchise was important in driving competition between consoles, and it worried that Microsoft could benefit by making the game exclusive to Xbox, or only available on PlayStation under materially worse conditions.

But Microsoft has since offered Sony a licence deal to address those concerns.

"Our provisional view that this deal raises concerns in the cloud gaming market is not affected by today's announcement," the CMA said, adding that its overall investigation was on course for completion by its April 26 deadline.

A Microsoft spokesperson said: "We look forward to working with the CMA to resolve any outstanding concerns."

(Reporting by Sarah Young and Paul Sandle; editing by William James)