While the focus of the gaming industry is firmly aimed at next month’s E3 and the upcoming tech and games to be presented and unveiled there, of the “big three,” it is Microsoft that will likely not have new hardware to show off at the major event. Nintendo has their new home console and Sony will show off their shiny new NGP handheld, but Microsoft has neither.

What they do have is an update that increases the storage capacity on their discs, although it’s not all that great for some, considering some Xbox 360 will be unable to take advantage.

Rumors flew abound yesterday as reports of Xbox 360s getting errors due to the dashboard update surfaced. Microsoft confirmed this to be the case, explaining that this is in fact happening to a “small” number of Xbox 360 units, rendering retail games unplayable.

[Updated: Major Nelson posted clarification that the console replacement plan is for errors caused by a previous system update and that it has nothing to do with the disc expansion releasing soon.]

The update only adds just over 1gb of storage (a whopping 15%), to the slow-reading part of the disc in order to help developers fit more content onto a single disc (L.A. Noire takes three discs on the Xbox 360). Perhaps Microsoft should have just waited until the next console releases and go with Blu-ray (25 gb vs. less than 8gb). We even said this may cause issues when the news first broke about the disc storage increase. From our own Jeff Schille:

“…there is always the possibility that such an update could potentially cause problems, particularly for older Xbox 360 systems. The Xbox 360 has long been notorious for the dreaded Red Ring of Death, most recently rumored to be linked to Kinect, and changing the format of the data stored on Xbox 360 game discs is no minor update. Here’s hoping that, when the new format rolls out, it does so without a hitch. Be sure to stay tuned to Game Rant for more information as it develops.”

Here’s Microsoft’s statement:

“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 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.”

“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.”

We at Game Rant hope very few are affected, but this such unnecessary inconvenience. On the bright side, we’re told that if this does happen to you, you’ll be compensated with a full year of Xbox Live Gold and an upgrade to a 250GB Xbox 360 S model. So it’s not all that bad if you have patience.

Follow me on Twitter @rob_keyes.

Source: MCV