Microsoft’s revised deal to buy Call Of Duty video game maker Activision has been given the green light by the UK’s competition watchdog, clearing the way for one of the technology sector’s biggest takeovers.

The Competition and Markets Authority (CMA) said the Xbox owner could go ahead with the takeover after agreeing to buy Activision without cloud gaming rights.

It puts an end to a half-year long battle between the watchdog and Microsoft, having moved to block the deal in April.

The new deal, which was initially worth 69 billion US dollars (£56.6 billion at the current exchange rate), will stop Microsoft from having a “stranglehold” over the UK cloud gaming market, the CMA said.

The regulator said it would preserve competitive prices for gamers and make sure consumers get more choice.

Assassin’s Creed video game maker Ubisoft is set to buy Activision’s cloud gaming rights instead.

Ubisoft has ambitious plans to offer new ways to access Activision’s content, including through multigame subscription services, the regulator said.

It also means that cloud gaming providers will not have to use Windows systems for Activision’s gaming content, which could reduce costs.

But the CMA criticised Microsoft for “dragging out” proceedings during its investigation into the merger.

Sarah Cardell, the CMA’s chief executive, said: “With the sale of Activision’s cloud streaming rights to Ubisoft, we’ve made sure Microsoft can’t have a stranglehold over this important and rapidly developing market.

“But businesses and their advisors should be in no doubt that the tactics employed by Microsoft are no way to engage with the CMA.

“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.”

The CMA initially rejected the deal over concerns that it would give Microsoft an unfair advantage in the cloud computer game market.

But it later pushed back its final decision so it could consider Microsoft’s argument that new developments mean the acquisition could go through.

A legal battle between the two was halted in July after the watchdog said it was willing to negotiate, and after a US judge said it would not stop the takeover.

Brad Smith, the president of Microsoft, said the group is “grateful” for the decision to approve the acquisition which he believes will “benefit players and the gaming industry worldwide”.

Mr Smith had described the initial decision as “probably the darkest day in our four decades in Britain”, adding that it sent a message that the EU is a more favourable place to start a business than the UK.

Activision Blizzard, which also creates World Of Warcraft and Candy Crush, said: “The CMA’s official approval is great news for our future with Microsoft, and we look forward to becoming part of the Xbox team.”