The FTC originally opposed the deal, arguing it would give Microsoft exclusive access to Activision games including the popular Call of Duty franchise.
Judge Jacqueline Scott Corley said: "The FTC has not shown it is likely to succeed on its assertion the combined firm will probably pull Call of Duty from Sony PlayStation, or that its ownership of Activision content will substantially lessen competition in the video game library subscription and cloud gaming markets.”
After the ruling, Microsoft said it would focus its efforts on resolving concerns in the UK.
Microsoft previously hit out at the UK’s Competitions and Markets Authority (CMA) for blocking the deal, with Brad Smith, the company’s president claiming it was “probably the darkest day in our four decades in Britain”.
The UK’s competition watchdog says it will reopen talks with Microsoft after the ruling.
Smith said he was “grateful” for the FTC decision and added: “We are considering how the transaction might be modified in order to address those concerns in a way that is acceptable to the CMA”.
The UK cloud gaming market has seen users more than triple from the start of 2021 to the end of 2022. It is forecast to be worth £11 billion globally and £1 billion in the UK by 2026.
Microsoft already accounts for an estimated 60-70% of global cloud gaming services.
