Microsoft has agreed a deal with technology holding firm XBOX Technologies that will allow it to keep the Xbox name for its new games console, to be launched in Europe next March.
The software giant reached an agreement on Friday with XBOX Technologies, a small Florida-based technology holding company with 60 staff.
XBOX will now alter its name and drop a possible legal challenge to Microsoft's use of the name, in exchange for an undisclosed sum.
The firm registered the name six months before Microsoft.
A lawsuit could have delayed Microsoft's US and Japan launches, scheduled for November.
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