Microsoft has reached a resolution in one Xbox 360 lawsuit. The latest court filing in the case of Kevin Ray v. Microsoft Corp. (PDF, 3 pages) indicates that the two sides have agreed to dismiss the case. Ray's lawyer, Darren Kaplan, said via phone Friday that the case has been settled, but the terms are confidential.

Ray's suit focused specifically on the Xbox 360 Fall 2006 software update, alleging that it caused his Xbox 360 and others to stop working. Although the case was filed as a proposed class action, the two sides agreed to settle it as an individual action. That means it won't apply to anyone else.

The settlement isn't a complete surprise, given what has happened since the suit was filed in November. Particularly relevant to this case was Microsoft's announcement in December that it would extend the Xbox 360 warranty to a full year, from the previous 90 days. Microsoft cited that warranty extension in its motion for summary judgment (PDF, 11 pages) filed in May.

That Microsoft motion also included this tidbit:

"Microsoft's customer service records show that on January 10, 2007, Plaintiff called Microsoft again, after Microsoft announced the new one-year warranty. ... The next day, Microsoft shipped a box with prepaid postage to Mr. Ray to use to send his Xbox 360 console back to Microsoft for repair. ... On January 28, 2007, a replacement console was shipped back to him. ... Microsoft did not charge Mr. Ray any money for replacing or shipping his Xbox 360 console. ... He has not contacted Microsoft with any further complaint.."

The general warranty extension, to one year, came before the company announced last month that it would extend the warranty to three years -- and take a $1 billion charge -- for consoles specifically afflicted by the dreaded "red ring of death." According to court filings, Ray's malfunctioning console displayed those tell-tale three red lights.

Microsoft hasn't said specifically what has caused the broader hardware problems. It also hasn't drawn any direct connection to the Fall 2006 update, except for acknowledging that the initial release did cause some hardware problems.

The settlement of the Ray lawsuit isn't the end of the Xbox 360 litigation. In particular, Microsoft has recently been the subject of several suits over alleged disc-scratching by the console. Ray's lawyer, Kaplan, is also representing a plaintiff in one of those cases.

I've asked a Microsoft spokesman for comment on the resolution of the Ray case, and I'll update this post if the company has anything to say.

Update, Monday morning: For the record, a Microsoft spokesman confirmed Friday afternoon that the case has been settled, and that the terms are confidential. No further info beyond that.