We've just had a look at a verified email, sent from Xbox LIVE customer support, claiming that a recent update provided to Xbox LIVE beta testers is preventing "a very small number of Xbox 360 owners from playing retail discs".

The email, which was verified via this twitter post from Xbox Support, offered the user in question a new Xbox 360 in response and a free year's subscription to Xbox LIVE.



"Checking my e-mail earlier today," said Avery Penn, "I found a rather interesting message from Xbox Customer Support, saying that a software update is stopping some Xbox 360s from reading game discs.

"Saying they were able to detect this issue over Xbox Live, Microsoft went on to say that, after jumping through all the necessary hoops, they'd send me a brand new Xbox 360 S and a year's free Xbox Live. At this point, my jaw hit the floor."

According to Avery, his 360 was still playing discs at the time the email was sent and, just for reference, his console was 60GB Pro from 2009.

The email was most likely referring to the Xbox LIVE update which is being phased in between May 19 and May 30 – an update which reflashes the DVD drives to a new stock firmware, and adds support for new XGD3 disk format. It's this update that allows an extra GB of usable storage on game discs.

That would most likely mean that the games Avery's Xbox 360 wouldn't be able to read haven't even been released yet – explaining why his 360 could still read currently available game discs.

We've contacted Microsoft for a response on the issue, which we're currently awaiting – and we'll update the story accordingly. In spite of the obvious issues, which may affect a good number of Xbox 360 users, we're impressed by the pre-emptive work of Xbox's Customer Support – as was Avery, who was seemingly happy with the situation.

If Microsoft continue to pre-emptively solve these issues, then more power to them, but problems may arise if users find themselves unable to play new games released in the future.

More news as we get it.

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.

I am happy to announce that, as a part of a new Xbox 360 System Update, we’re expanding our integration with PayPal to allow U.S. and international Xbox LIVE users to make purchases on their Xbox 360 consoles with their PayPal accounts.* Once you’ve linked your PayPal account to your Xbox LIVE account on Xbox.com, you’ll be off and running to use it as a billing option, allowing you to buy content such as Microsoft Points, Xbox LIVE Gold subscriptions and Games on Demand titles.

We are rolling out the Xbox 360 System Update gradually to all Xbox LIVE users starting today and throughout the next couple weeks to ensure a high quality deployment. Just like any other update to our service, you will know you’ve received it when you turn on your Xbox 360 console, connect to Xbox LIVE and receive a notification to download the update. It’s important to note that it may take a few days to make its way around the globe. Thanks for your patience if you don’t get it right away!

This particular update will also bring an auto-standby feature that places your console on standby if it’s idle for more than one hour, helping to reduce power consumption. This feature will be automatically enabled after you download the update. You can change this setting in the System Settings on your console.

Finally, thank you to all who participated in the preview program for this Xbox 360 System Update. Your contributions helped us prepare for the updated Xbox 360 disc format capability that comes with this release.