Microsoft has submitted a new deal to buy Activision Blizzard after its original $69bn (£59bn) bid was rejected by the UK competition watchdog.

Microsoft's UK boss Brad Smith said the offer was "substantially different" and he expected it to be approved.

The UK's Competition and Markets Authority will now review the deal but said: "This is not a green light."

It will make a decision on the proposal by 18 October – without its approval the deal cannot go ahead globally.

Under the new offer Microsoft won't buy the rights for Activision's existing or new games stored in the cloud.

The pledge, which will last 15 years, will not cover Activision's PC and console games in the European Economic Area.

Games stored in the so-called cloud allow players to buy content when they like, similar to a streaming service such as Netflix.

Microsoft's deal to buy the Call of Duty maker, struck last year, was set to be the biggest of its kind in gaming industry history.

But it has split regulators around the world, some of whom fear it could be anti-competitive.

The US Federal Trade Commission continues to try to block the deal in America despite having been overruled several times by the courts.

The European Union and China meanwhile have said the tie-up can go ahead.

But the UK announced plans to block the deal in April, warning it would harm innovation and choice for gamers in the fast-growing cloud gaming business.

The move sparked an angry reaction from Activision, while Microsoft's UK president Brad Smith said it was "bad for Britain" and marked Microsoft's "darkest day" in its four decades of working in the country.

Under the revised deal, Microsoft said that instead of controlling all of Activision's games, which also include Candy Crush, the content would be sold to rival video game publisher Ubisoft.

Ubisoft can then supply Activision's content "to all cloud gaming service providers including to Microsoft itself".

Mr Smith said the deal had been "a longer journey than expected", but under the new terms he said: "Microsoft will not be in a position either to release Activision Blizzard games exclusively on its own cloud streaming service—Xbox Cloud Gaming – or to exclusively control the licensing terms of Activision Blizzard games for rival services."

Microsoft makes the Xbox gaming console and wants to buy Activision to add more titles to its Game Pass streaming service. This allows gamers to download content to their consoles and mobile phones.

Rivals such as Sony have also objected to the deal, concerned that Microsoft could stop major games being available to its own PlayStation business.

Modern Warfare 2, the latest instalment in the Call of Duty series, made $1bn in its release weekend, and more than half of all copies sold in the UK were for PlayStation.

Sarah Cardell, chief executive of the CMA, said Microsoft's new and restructured deal was "substantially different from what was put on the table previously".

She said the CMA would now examine the offer.

"We will carefully and objectively assess the details of the restructured deal and its impact on competition, including in light of third-party comments," she said.

"Our goal has not changed – any future decision on this new deal will ensure that the growing cloud gaming market continues to benefit from open and effective competition driving innovation and choice."