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Kotaku
GameShout is reporting that Microsoft won't replace scratched game disks with the ruined game, instead they are offering up free copies of Perfect Dark Zero.
We reported back near launch day that people were complaining about the 360 scratching their game discs. This can happen, though right now the only proven technique is moving your 360 from vertical or horizontal (or vice-versa) while a disc is in the unit, spinning.
It's unfortunate, but I think it would pretty easy for Microsoft to stop that particular issue by slapping a sticker on the front of the box saying not to move it while the power is on.
Microsoft Xbox 360 Refuses to Replace Scratched Discs [Gameshout]
