The deadline for the European Commission, which is investigating the deal, to set out a formal list of competition concerns known as a statement of objection is in January. Offering remedies before such a document is issued could shorten the regulatory process.

Microsoft's remedy would consist mainly of a 10-year licensing deal to Playstation owner and critic of the deal Sony, another person with direct knowledge said.

(Reporting by Foo Yun Chee; Editing by Jan Harvey)