According to news from Kotaku, the new Xbox 360 firmware upgrade arriving imminently is incompatible with "a very small number" of consoles, and will prevent certain games from running on the console. The good news is that the platform holder will replace these machines with a brand new Xbox 360 S with 250GB hard drive.
It's a remarkable story, with Kotaku inferring that the new XGD3 disc standard - which adds 1GB of useable data to 360 DVDs - may not be compatible with a certain percentage of Xbox 360 DVD drives. However, the truth behind this incompatibility appears to be somewhat more involved. Since the arrival of the beta version of the new dashboard, hackers have been reverse-engineering it and finding a number of surprising additions never seen before in previous upgrades.
Firstly, this new release is the first that will actually see the drive firmware being rewritten by the Xbox 360 itself. Any one using a current hacked DVD drive will find that updating to the new dash instantly kills their ability to run pirate software, with the hacked code completely expunged from the DVD drive. Microsoft has employed a wide range of DVD drives in its machines from launch - the best guess is that not all of them can be flashed directly, necessitating a swapped console.
This new firmware doesn't just open up the additional 1GB of space previously set aside for the outdated, compromised security scheme - it features a completely brand new anti-piracy mechanism. In the past, previous attempts to foil piracy (such as AP 2.5) only worked on certain drives, with the feature disabled if you had older hardware. With the new system, it seems that the anti-piracy measures are so deeply embedded that they cannot simply be skipped in the same way.
We've also heard a number of reports that the new security protocols go beyond simply updating the dash. Multiple developer sources have told us that Microsoft has upped its game here significantly, and is now calling on studios to help get involved in combating Xbox 360 game piracy. According to this information, new APIs are being worked on that programmers can add to their titles which perform additional scans of the DVD during gameplay, not just when the game is booted as is currently the case.
Burned copies of Xbox 360 games are not 100 per cent identical to the originals, so hacked DVD drive firmware masks the differences with on-the-fly patching. Microsoft's hope is that in-game checks will be far harder to isolate and patch, and with control of these features in the developer's hands, pirate copies of games could even be "downgraded" into playable demos - for example, they could become non-functional after a couple of levels' play.
XDG3 is clearly a big deal for Microsoft - as evidenced by the company effectively giving away free Xboxes to ensure compatibility for all its userbase - but whether its new anti-piracy measures will be enough remains to be seen. The firm's last effort - AP2.5 - was dispensed with in a matter of days, and already drive firmware hacker "commodore4eva" is claiming that he has defeated the new countermeasures introduced in the beta dash...