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Microsoft unveiled a 360 Dashboard Update to Beta testers a couple of days ago which makes way for a new disc format that allows for an extra GB of usable storage on game discs. However the testers have reported that a small number of them experienced a disc read error after updating.
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 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.
Any Xbox 360 owners receiving this error are encouraged to contact us at www.xbox.com/support/contact so we can verify if the console has been impacted. The console will be replaced and the owner will recieve 12 month of Xbox Live Gold.