The European Union’s antitrust regulator approved Microsoft’s ((MSFT Quick QuoteMSFT - Free Report) ) $74.5 billion deal to acquire Activision Blizzard, potentially making Microsoft the third-largest gaming company globally by revenue.

The approval is conditional on Microsoft entering long-term licensing agreements to allow gaming consumers continued access to Activision's games, including "Call of Duty," even on rival cloud streaming services.

The European Commission concluded that Microsoft's acquisition would not threaten the market for gaming consoles and rival multi-game subscription services, but it could threaten competition in the market for distribution of games through cloud streaming services and the market for PC operating systems.

The European Commission's approval stipulates that Microsoft must provide a 10-year comprehensive licensing agreement to consumers in the European Economic Area, allowing them to stream all current and future Activision Blizzard PC and console games using any cloud game streaming service.

The EU's decision contrasts with the UK’s Competition and Markets Authority and the US Federal Trade Commission, both of which have objected to the acquisition, expressing concerns about competition and potential changes in the fast-growing cloud gaming market.

Microsoft and Activision Blizzard plan to appeal against the UK's decision, with Activision threatening to reassess its growth plans for the UK, claiming the UK is "closed for business."

Microsoft's acquisition of Activision Blizzard would also benefit from the mobile-focused King business, targeting the fastest-growing gaming segment, mobile gaming, particularly in developing countries where smartphones are more affordable than high-powered PCs and consoles.