Affected users will also be given an Xbox Live Gold subscription
Microsoft has pledged to replace old Xbox 360 systems after it was discovered a new firmware upgrade is not compatible with all editions of the machine.
The firm has sent out a mass email to those who own an Xbox 360 that is incompatible with a new firmware, offering a brand new Xbox 360 S for free, and an Xbox Live Gold annual subscription gratis.
The new firmware in question is said supports a new Xbox 360 disc format,.
"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," Microsoft told Eurogamer.
"This issue manifests itself a as a unique 'disc unreadable' or 'disc unsupported' error on the screen. 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."
Microsoft asks users to visit an Xbox page on the firm’s website so it can “verify if the console has been impacted" by the update.