Whenever I enter a disc in my console, it says it can't read the liscence.

Hi, I can refer you to the Xbox Guides regarding disc troubleshooting errors. I believe these guides will also contain links to schedule a repair with Microsoft in case this may be necessary.

Xbox One troubleshooting: https://support.xbox.com/xbox-one/console/disc-error

Xbox 360 troubleshooting: https://support.xbox.com/xbox-360/console/disc-drive-solution

No, whenever I put in a disc it says reading n then open tray.

I can't. It goes to 84% than says can't read the disc.

The disc works on my 360 E.

When the disc loads, it says something along the lines of "This game is not compatible with this console"

But you're telling me it works from an update I've not received. I don't know where this update should pop up.

The start of your thread says you can load up Halo 2, that tells me you already have the update, hence there won't be another one when you insert this disc.

Your 360 console contains an optical drive in the form of a DVD drive. Reading discs, especially old one's with an old console optical drive isn't an exact science. The Xbox 360 E's were the last consoles to be released and hence the hardware in these machines will have less 'wear and tear'.

Your other console says the game isn't compatible because it can't read it, simple as that really. Your Outrun game may have scratches that the Xbox 360E has less trouble reading, but the old console can't read because the laser isn't in such good condition.

I can't it gets to about 30% and says unable to read disc