Microsoft will be rolling out a new dashboard update over the next few weeks, but beta testers have uncovered an annoying side effect of the new disk format, the inability to read any DVDs. Microsoft is introducing a new disk format, to improve its security, and some older X360 models apparently have issue with the new XGD3 format. As a solution Microsoft confirmed it will simply require the customer to send in the defective console, and replace it with a new 250GB slim Xbox 360, free of charge, and a year free Xbox Live.
Xbox LIVE's Major Nelson clarifies that the console replacement plan is related to a previous update, NOT the system update that has been in public beta and will be deployed shortly, claiming that 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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