When it comes to fixing Xbox’s update error, players seem to have found success with a few different methods. According to YouTube user OFFICIAL BLKMAGS, their issues were resolved after resetting their router. The YouTuber explained, “Xbox has built-in software firewalls that needs to be reset by resetting the router.” A commenter on this video also reported success with this method.
Abigail Hazel of SmoothCreationsOnline apparently resolved this issue by power-cycling the console, removing the ethernet cable, disconnecting a third-party hard drive, and then unplugging the Xbox console, then plugging it back in. Reddit user u/Fried_Green_Tom also reported having success by following those steps.
Another possible resolution could be to perform an offline system update. This involves going to Xbox’s official website and downloading an OSU1 file to a FAT32-formatted USB drive that must have at least 6 GB of space available. Once you’ve stored all the necessary files onto your USB flash drive, power cycle your Xbox and unplug for 30 seconds. After you’ve waited 30 seconds, reconnect the Xbox. Hold the Pair and Eject buttons down at the same time, then press the power button. Continue to hold the Pair and Ejects buttons down together until you hear a series of power-on sounds, then release the buttons. This will take you to a troubleshooting screen. Then insert your USB drive with the Xbox update on it. The “Offline system update” option will then be visible. Click on that option and your Xbox should fully update before restarting. After this, you should be all set!