The U.K.’s Competition and Markets Authority on Friday said it has narrowed the scope of its investigation into Microsoft’s takeover of games publisher Activision, in a major reprieve for the U.S. tech giant as it pursues an expansion of its video game business.

In February, the CMA published provisional findings from its probe into the takeover, stating at the time that the transaction may result in higher prices, fewer choices and less innovation. Among its concerns, the regulator flagged that the deal would cause a substantial lessening of competition in the console gaming market.

Since then, the regulator has received a “significant amount” of feedback from various industry participants on the deal. With this new evidence, the CMA now says it no longer believes the transaction will hamper competition in console games.

“Having considered the additional evidence provided, we have now provisionally concluded that the merger will not result in a substantial lessening of competition in console gaming services because the cost to Microsoft of withholding Call of Duty from PlayStation would outweigh any gains from taking such action,” Martin Coleman, chair of the independent panel of experts conducting the CMA investigation, said in a statement Friday.

“Our provisional view that this deal raises concerns in the cloud gaming market is not affected by today’s announcement. Our investigation remains on course for completion by the end of April.”

The CMA’s Friday comments suggest that Microsoft appears to have gotten one of its staunchest regulatory critics partly onside.

This is a breaking news story and will be updated shortly.