Microsoft confirms it will replace some Xbox units

Microsoft is planning to replace an unspecified number of Xbox 360 units with new 250GB Xbox 360 S consoles.
Yesterday, Twitter user @lovedecake posted an image of an e-mail he apparently had received from "Xbox Customer Support." That e-mail cited an issue with a recent Xbox 360 firmware update that was "preventing a very small number of Xbox 360 owners from playing retail game discs." A Xbox support staffer tweeted a confirmation to @lovedecake that verified the e-mail.
Earlier reports asserted the issue was related to the most recent firmware update for a group of Xbox 360 testers that allows for an extra gigabyte of space on game discs. However, Microsoft confirmed to CNET today that the issue actually relates to an earlier firmware update that was released to all Xbox users. The company would not specify which one.
"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," a Microsoft representative told CNET today in an e-mailed statement. "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," the rep continued. "Any Xbox 360 owners receiving this error are encouraged to contact us so we can verify if the console has been impacted."
Microsoft is requiring affected customers to "start a repair request," verifying key information, including their console serial number, to ensure the respective device is one impacted by the update. Once that's complete, users will need to send their Xbox 360 consoles back to Microsoft to get a new Xbox 360 S.
Though it might not be the best scenario for an upgrade, consumers would be getting the latest version of the Xbox 360 on the market. The device comes with a black finish and the aforementioned 250GB hard drive. It's also smaller than its predecessor.
To further sweeten the pot for affected users, the e-mail posted by @lovedecake states that Microsoft will also offer a free 12-month subscription to Xbox Live. Microsoft's console offer is valid through the end of September, the e-mail states.