[Update] Turns out there’s been some confusion about this, and it’s not the incoming system update but a previous one responsible for the problem.
“Clarification time! The console replacement plan that is the subject of some of today’s headlines is related to a previous update, NOT the system update that has been in public beta and will be deployed shortly,” writes Xbox-everything guy Larry ‘Major Nelson’ Hryb on his blog. “The new disc format that is part of the beta has been rigorously tested across all Xbox 360 models and there are no known compatibility issues.”
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Looks like the latest Xbox dashboard update is prepped to be the new Red Ring of Death, with Microsoft already admitting it’s going to break a “very small number” of consoles on the way in. Which may or may not actually mean “a lot”.
The incoming update, which includes support for a new disc format and apparently some sort of new security layer, was in a public beta a little earlier this year.
“Following a recent update to our system software, we have become aware of an issue that is preventing a very small number of Xbox 360 owners from playing retail game discs,” Microsoft says.
“This issue manifests itself a as a unique ‘disc unreadable’ or ‘disc unsupported’ error on the screen. We are also able to detect this issue over Xbox Live and are proactively reaching out to customers that may be impacted to replace their console.”
Microsoft also recommends that anybody affected should contact them, “so we can verify if the console has been impacted” and replace it (again, lol?).
It’s not yet clear which models are affected by the problem. It’s also not clear just how this will work for South African Xbox 360 owners, but we are looking into it.