Microsoft will change the way 360's read disks with an update in order to free up some space on game disks. Unfortunately for some it's just made everything worse. After the update a "very small number of Xbox 360 owners" were unable to play retail disks.
Microsoft has however reached out to those affected, offering them a replacement Xbox 360 S. The company released this statement.
"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. This issue manifests itself 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."
UPDATE: "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. 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. Hope that clears a few things up." Xbox LIVE's Major Nelson
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