Microsoft has acknowledged a problem with colour output in video playback following the recent Xbox 360 dashboard update.
A post on Major Nelson's Twitter feed stated that a fix is currently in the works.
"We're aware of the colorspace issue w/ some Xbox video apps & are working on a fix. No ETA yet but we hope to have an update soon," he wrote.
As addressed in a recent Digital Foundry investigation, the new update appears to force video content to run at limited range RGB levels, resulting in colours appearing washed out, with blacks becoming grey.
A more in-depth analysis of the final update also revealed that 1080p video files were being downscaled to 720p - something that never happened on the old NXE dash, and which curiously didn't seem to affect Microsoft's own Zune marketplace movie rentals.
Thus far there has been no comment from Microsoft on whether the resolution issue will be corrected.
Engadget also references reports that HDMI output through the updated console sees HDCP authentication problems with certain TVs, affecting video output.