Microsoft has completed its $69bn (£56bn) takeover of Call of Duty maker Activision Blizzard in the gaming industry's biggest ever deal.
It comes as Microsoft, which owns the Xbox gaming console, was given the green light for the global deal after UK regulators approved it.
The Competition and Markets Authority said its concerns had been addressed, after it blocked the original bid.
Microsoft's Phil Spencer said securing Activision was "incredible".
Following the announcement of the deal, Activision Blizzard CEO Bobby Kotick confirmed in a letter to staff that he would step down at the end of 2023.
"I have long said that I am fully committed to helping with the transition," he said. "[Phil Spencer and I] both look forward to working together on a smooth integration for our teams and players."
Despite concerns from rivals such as PlayStation-maker Sony, and regulators over competition in the gaming industry, Mr Spencer, who is chief executive of Microsoft Gaming, sought to reassure gamers.
"Whether you play on Xbox, PlayStation, Nintendo, PC or mobile, you are welcome here - and will remain welcome, even if Xbox isn't where you play your favorite franchise," Mr Spencer said in a statement following the takeover.
"Because when everyone plays, we all win. We believe our news today will unlock a world of possibilities for more ways to play."
'Preserve prices'
Under the re-worked deal, Microsoft has handed the rights to distribute Activision's games on consoles and PCs over the cloud to French video game publisher Ubisoft.
But while a concession has been made, Microsoft will now control games such as Call of Duty, World of Warcraft, and Candy Crush that will provide the firm with huge revenues.
The CMA said the revised deal would "preserve competitive prices" in the gaming industry and provide more choice and better services.
But despite approving the takeover, the watchdog criticised Microsoft's conduct over the near-two year battle.
"Businesses and their advisors should be in no doubt that the tactics employed by Microsoft are no way to engage with the CMA," said chief executive Sarah Cardell.
"Microsoft had the chance to restructure during our initial investigation but instead continued to insist on a package of measures that we told them simply wouldn't work. Dragging out proceedings in this way only wastes time and money."
After the competition watchdog blocked the takeover earlier this year, Microsoft's president Brad Smith hit out at the CMA's decision, which it said was "bad for Britain" and contradicted "the ambitions of the UK to become an attractive country to build technology businesses".
It has proved controversial and received a mixed response from regulators around the world, but has already been passed by regulators in the European Union. The US competition watchdog recently saw its attempt to pause the purchase rejected by the courts.
But the CMA's Ms Cardell said with the sale of Activision's cloud streaming rights to Ubisoft, which makes Assassin's Creed, "we've made sure Microsoft can't have a stranglehold over this important and rapidly developing market".
"We were clear that that deal couldn't go ahead, because it would have harmed competition, and that would have been bad for UK gamers," she added.
"We take our decisions free from political influence and we won't be swayed by corporate lobbying."
'Final hurdle crossed'
Mr Smith said Microsoft was "grateful for the CMA's thorough review and decision".
Microsoft is paying cash for Activision at a premium price of $95 per share, meaning Mr Kotick, Activision's outgoing chief executive, is set for a $400m payday, with chairman Brian Kelly earning $100m, based on the shares they own.
Under the restructured agreement, Microsoft has agreed to transfer the rights to stream Activision games from the cloud to Ubisoft for 15 years outside the European Economic Area (EEA). This includes EU countries as well as Iceland, Liechtenstein and Norway.
After the 15 years are up, Ubisoft will no longer hold the cloud gaming rights for Activision's content, but it is understood the regulator believes the time span will see rivals become established for the cloud gaming market to be more competitive.
Microsoft is hopeful the takeover will boost demand for its Xbox console and enable the tech firm to add more titles to its Xbox Game Pass service, where members pay a subscription fee to access a catalogue of games from the cloud - either by downloading or by streaming.
The deal with Activision also means Microsoft will own its studio solely purposed for mobile games, with hopes of expanding on the successes of titles such as Candy Crush.
The takeover further cements Microsoft as a video game giant and could catapult it ahead of Nintendo to become the third-biggest player in the industry behind Sony, the owner of the PlayStation console, and market leader Tencent.
Sony strongly opposed this deal over concerns that big Activision titles like Call of Duty could become Xbox exclusives over time.
The PlayStation currently outsells Microsoft's Xbox but like all entertainment platforms, the key to success is access to the best content, though Sony is also not averse to buying up successful studios.
'More choice'
Nicky Stewart, a consultant and former commercial director of cloud services provider UK Cloud, said the decision to approve the takeover was "great news for gamers".
"[It will lead to] more choice, more innovation, better value and improved gaming experiences and a healthy, competitive market," said Ms Stewart, who is also a former head of ICT at the Cabinet Office government department.
"The CMA has forced Microsoft to make concessions in the UK that other regulators have not. This is good news for the UK's nascent gaming industry."
By Michael Race & Zoe Kleinman
BBC News
Microsoft has completed its $69bn (£56bn) takeover of Call of Duty maker Activision Blizzard in the gaming industry's biggest ever deal.
It comes as Microsoft, which owns the Xbox gaming console, was given the green light for the global deal after UK regulators approved it.
The Competition and Markets Authority said its concerns had been addressed, after it blocked the original bid.
Microsoft's Phil Spencer said securing Activision was "incredible".
Following the announcement of the deal, Activision Blizzard CEO Bobby Kotick confirmed in a letter to staff that he would step down at the end of 2023.
"I have long said that I am fully committed to helping with the transition," he said. "[Phil Spencer and I] both look forward to working together on a smooth integration for our teams and players."
Despite concerns from rivals such as PlayStation-maker Sony, and regulators over competition in the gaming industry, Mr Spencer, who is chief executive of Microsoft Gaming, sought to reassure gamers.
"Whether you play on Xbox, PlayStation, Nintendo, PC or mobile, you are welcome here - and will remain welcome, even if Xbox isn't where you play your favorite franchise," Mr Spencer said in a statement following the takeover.
"Because when everyone plays, we all win. We believe our news today will unlock a world of possibilities for more ways to play."
'Preserve prices'
Under the re-worked deal, Microsoft has handed the rights to distribute Activision's games on consoles and PCs over the cloud to French video game publisher Ubisoft.
But while a concession has been made, Microsoft will now control games such as Call of Duty, World of Warcraft, and Candy Crush that will provide the firm with huge revenues.
The CMA said the revised deal would "preserve competitive prices" in the gaming industry and provide more choice and better services.
But despite approving the takeover, the watchdog criticised Microsoft's conduct over the near-two year battle.
"Businesses and their advisors should be in no doubt that the tactics employed by Microsoft are no way to engage with the CMA," said chief executive Sarah Cardell.
"Microsoft had the chance to restructure during our initial investigation but instead continued to insist on a package of measures that we told them simply wouldn't work. Dragging out proceedings in this way only wastes time and money."
After the competition watchdog blocked the takeover earlier this year, Microsoft's president Brad Smith hit out at the CMA's decision, which it said was "bad for Britain" and contradicted "the ambitions of the UK to become an attractive country to build technology businesses".
It has proved controversial and received a mixed response from regulators around the world, but has already been passed by regulators in the European Union. The US competition watchdog recently saw its attempt to pause the purchase rejected by the courts.
But the CMA's Ms Cardell said with the sale of Activision's cloud streaming rights to Ubisoft, which makes Assassin's Creed, "we've made sure Microsoft can't have a stranglehold over this important and rapidly developing market".
"We were clear that that deal couldn't go ahead, because it would have harmed competition, and that would have been bad for UK gamers," she added.
"We take our decisions free from political influence and we won't be swayed by corporate lobbying."
'Final hurdle crossed'
Mr Smith said Microsoft was "grateful for the CMA's thorough review and decision".
Microsoft is paying cash for Activision at a premium price of $95 per share, meaning Mr Kotick, Activision's outgoing chief executive, is set for a $400m payday, with chairman Brian Kelly earning $100m, based on the shares they own.
Under the restructured agreement, Microsoft has agreed to transfer the rights to stream Activision games from the cloud to Ubisoft for 15 years outside the European Economic Area (EEA). This includes EU countries as well as Iceland, Liechtenstein and Norway.
After the 15 years are up, Ubisoft will no longer hold the cloud gaming rights for Activision's content, but it is understood the regulator believes the time span will see rivals become established for the cloud gaming market to be more competitive.
Microsoft is hopeful the takeover will boost demand for its Xbox console and enable the tech firm to add more titles to its Xbox Game Pass service, where members pay a subscription fee to access a catalogue of games from the cloud - either by downloading or by streaming.
The deal with Activision also means Microsoft will own its studio solely purposed for mobile games, with hopes of expanding on the successes of titles such as Candy Crush.
The takeover further cements Microsoft as a video game giant and could catapult it ahead of Nintendo to become the third-biggest player in the industry behind Sony, the owner of the PlayStation console, and market leader Tencent.
Sony strongly opposed this deal over concerns that big Activision titles like Call of Duty could become Xbox exclusives over time.
The PlayStation currently outsells Microsoft's Xbox but like all entertainment platforms, the key to success is access to the best content, though Sony is also not averse to buying up successful studios.
'More choice'
Nicky Stewart, a consultant and former commercial director of cloud services provider UK Cloud, said the decision to approve the takeover was "great news for gamers".
"[It will lead to] more choice, more innovation, better value and improved gaming experiences and a healthy, competitive market," said Ms Stewart, who is also a former head of ICT at the Cabinet Office government department.
"The CMA has forced Microsoft to make concessions in the UK that other regulators have not. This is good news for the UK's nascent gaming industry."