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In a major development in the gaming industry, Microsoft is on the cusp of finalizing its contentious $75 billion acquisition of Activision Blizzard. The tech giant took a significant step forward when arch-rival Sony signed a license agreement for Activision's flagship title, Call of Duty. 

This move comes after an 18-month battle between the two gaming giants, signaling a truce and bringing Microsoft closer to reshaping the gaming landscape.

The agreement between Microsoft and Sony addresses one of Sony's primary concerns about the acquisition. Sony had feared that Microsoft would make Call of Duty exclusive to its own Xbox game console and other services, thereby reducing competition. 

Signing the license agreement demonstrates its commitment to keeping Call of Duty available on PlayStation. even after the acquisition is complete.

Phil Spencer, the head of Microsoft's Xbox gaming division, confirmed the agreement on Twitter, stating that they had signed a "binding agreement to keep Call of Duty on PlayStation following the acquisition."

The weekend announcement follows a series of regulatory breakthroughs for Microsoft. 

Last week, the company achieved favorable outcomes on both sides of the Atlantic, bringing it closer to securing victory in the acquisition deal. The stage is set for Microsoft to reshape the gaming industry. And it plans to consolidate its position as a dominant player.

The resolution of the rivalry between Microsoft and Sony over Call of Duty licensing represents a significant turning point. 

Previously, Sony had declined Microsoft's offer to license Activision's games, which fueled regulatory attempts in the US and UK to block the deal.

 Microsoft argued that Sony's refusal was driven by competitive motives rather than genuine concerns for the gaming community. An email from PlayStation chief Jim Ryan surfaced, indicating that Sony had no intention of turning Activision games into Xbox exclusives. The situation changed when Ryan reviewed the proposed terms offered by Microsoft.

Microsoft and Activision Blizzard deal details

Microsoft has already secured 10-year licenses for Activision games with other companies including Nintendo. The licensing agreement with Sony adds a crucial piece to the puzzle. 

By covering both the PlayStation console and the PlayStation Plus subscription service, Microsoft addresses concerns raised by the US Federal Trade Commission (FTC) regarding competition in the console, subscription, and cloud streaming markets. 

The legal battles surrounding the acquisition have faced setbacks from regulatory bodies. A San Francisco court recently rejected the FTC's request for an injunction to halt the deal. And subsequent appeals against that ruling were also denied.

In response to these developments, the UK's Competition and Markets Authority (CMA) has offered to put its opposition to the deal on hold. This would allow Microsoft an opportunity to address its remaining concerns in order to close the deal.

The companies will participate in a case management conference before the Competition Appeal Tribunal. Both parties have requested the CAT to postpone the appeal against the CMA's April decision to block the deal, indicating a willingness to negotiate and find a mutually agreeable solution.