In December, after Microsoft launched the massive Dashboard update for
the Xbox 360 console, reports started to come in that the quality of the
console's video playback was not as good as it was before the update.
Users complained on Xbox message board about issues with washed out
colors and poor video compression. Eurogamer.net's Digital Foundry did
an investigation and concluded that there were indeed some problems with
the Xbox 360's video playback. However, Microsoft didn't respond to the
complaints at the time.

On Thursday, Microsoft decided to admit there was a problem with the
game console's video playback. Microsoft's Larry Hyrb posted a note on
his Twitter account saying, "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."

While that sounds like good news on the surface there have been more
reports of other video issues with the Xbox 360. Earlier this month,
Digital Foundry did another investigation and found that 1080p video
outputs can play back but have been scaled down to 720p resolution,
among other issues.

We do have to wonder why Microsoft elected to launch the new Dashboard
update with all of these fairly obvious video issues. Hopefully
Microsoft will get all of these video playback problems solved in the
near future.