Following the release of the latest Xbox 360 firmware update, a large number of Xbox 360 users reported that their consoles have started giving out disc read errors.
Microsoft acknowledged the problem and made it clear that it is "not specific to older or newer versions of Xbox 360". The company also started a replacement program for affected consoles.
The highlight of the firmware update which caused the problem is a change in the disc reading algorithms which strengthened copy protection while making available more disc space for game content. The most likely explanation for the bug is incompatibility between some DVD models and the new algorithms.
Microsoft issued the following official statement regarding the matter:
"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 and is unrelated to our recent public beta."
"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."
"This disc read error message is tied to a change in the disc reading algorithms in a recent software update and is not specific to older or newer versions of Xbox 360."
