(Photo: Rich Polk/Getty Images for Activision) Microsoft was given the go-ahead to finalize the acquisition of the company behind the ‘Call of Duty’ games.

Activision Blizzard's stock skyrocketed as much as 11% Tuesday midday (July 11) after a federal court ruling favored tech giant Microsoft to proceed with its $69 million deal to acquire the video game publisher behind the "Call of Duty" series.

The stock market jump means its shares climbed up to $91.83 around midday Tuesday.

Microsoft was challenged by the Federal Trade Commission (FTC), saying the merger would hurt competition in the gaming industry. The California judge involved in the case ruled the deal would in fact enhance access to popular game franchises such as "Call of Duty" and other titles published by Activision.

Another opposition to the Microsoft-Activision deal was Sony which produces the PlayStation 5, the main rival to Microsoft's Xbox series. The company said it is concerned that Microsoft would make popular franchises like "Call of Duty" exclusive to consoles.

While Microsoft denied this, critics point to the firm's $11 billion takeover of Zenimax in 2021, which made many popular games shift to Xbox exclusively. These include "Elder Scrolls" as well as the massively-hyped "Starfield," set to be released later this year, which had previously been slated for release on both Xbox and PlayStation.

Read Also: Microsoft Confirms More Layoffs, Apart From 10,000 Job Cuts in January

FTC: Game's Not Over Yet

The court's decision to continue the deal is a blow to the FTC and the Biden administration which sought to curtail the mergers that it says harm competition and are bad for consumers. With the FTC's challenge dismissed, Microsoft and Activision can proceed with the merger scheduled for August.

Microsoft Vice Chair and President Brad Smith expressed relief on Twitter, saying they are grateful to the court for the "quick and thorough decision" and hoping other jurisdictions would "continue working towards a timely resolution."

"The evidence showed the Activision Blizzard deal is good for the industry and the FTC's claims about console switching, multi-game subscription services, and cloud don't reflect the realities of the gaming market," added Xbox head Phil Spencer.

Meanwhile, Activision Blizzard CEO Bobby Kotick said in a statement the merger will "enable competition rather than allow entrenched market leaders to continue to dominate our rapidly growing industry."

However, the FTC would still challenge Microsoft in a scheduled antitrust hearing in August, saying in a statement it was "disappointed" with the decision and would announce next steps in the coming days.

"We are disappointed in this outcome given the clear threat this merger poses to open competition in cloud gaming, subscription services, and consoles," FTC spokesperson Douglas Farrar said.

One of the paths the FTC may take, moving forward, is to take the decision to the US Court of Appeals for the 9th Circuit. Both Microsoft and Activision must find a way forward to resolve opposition from the Competition and Markets Authority in the UK.

Microsoft Axes More Jobs

While the company has been relieved with its legal fight against the US government for now, Microsoft confirmed it would be laying off more employees, adding to the 10,000 job cuts announced in January. Sources say the latest round affects salespeople and customer success representatives.

Earlier this year, Microsoft CEO Satya Nadella told the workforce about its plans to revamp its hardware lineup and consolidate its leases, as well as in preparation for the onboarding of Activision.

Related Article: US Regulators to Decide Fate of Microsoft's $69 Billion Video Game Deal