[Update] Microsoft clarifies that the issue is linked to a past update that changed the way the Xbox 360 reads game discs.

[Original Story] Microsoft has confirmed that some Xbox 360 consoles are not compatible with its latest firmware update, and has promised to offer replacement systems to those affected, Eurogamer reports.

The company stressed that "a very small number" of Xbox 360 users will be impacted by this issue, which manifests itself as a 'disc unsupported' or 'disc unreadable' error. The firmware in question is not tied to a specific region, and is not the update that is currently in beta test.

There are a number of ways Microsoft promises to assuage the headaches caused by the issue. The hardware manufacturer notes that it will be able to detect which systems are affected via Xbox Live and will "proactively reaching out to customers"; however, Microsoft urged those having problems to contact the company via its Xbox Support website to verify "if the console has been impacted."

Microsoft promises to replace the systems with new Xbox 360 S consoles, which includes a 250GB hard drive.

According to Digital Foundry, the firmware combats pirated software. Reports also indicate that the firmware prepares the Xbox 360 for use with the new XGD3 disc standard, which is said to add 1GB of usable data to Xbox 360 game discs.