How to reset an Xbox 360 console
Simple! Go to 'System Settings' > 'Console Settings' > 'System Info', then press these buttons: LT, RT, X, Y, LB, RB, Y, 'Down' on D-pad twice, and 'A'. Follow the prompts!
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If you're ready to wipe everything, head to 'Settings' > 'System' > 'Storage'. Highlight your primary storage device, press 'Y' for device options, and select 'Format'. Boom, fresh start!
Just remove the storage device, restart, and plug it back in. That's a soft reset, easy-peasy!
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