Updated 5-Oct-2016: Well, that was fast. Microsoft released a fix-it script and an explanation. Details here: Microsoft releases fix for Windows 10 cumulative update issues
Those of us who routinely monitor Microsoft's support forums knew last week that something was wrong with the latest cumulative update to Windows 10. We learned yesterday that Microsoft has now acknowledged the issue and is working on a fix.
The problem occurs with Cumulative Update KB3194496, which was released for Windows 10 version 1607 on Sept. 29, 2016.
For most users running the latest public release of Windows (version 1607, also known as the Anniversary Update), this cumulative update completes successfully and brings the current build number to 14393.222.
But if you're one of the unlucky ones affected by this bug, after the required restart, the system reaches the "100 percent complete" mark and then announces: "We couldn't complete the updates. Undoing changes."
The whole process only takes a few minutes but it's annoying. It's also frustrating, because the update will try again the next day, only to fail again.
Fortunately, the issue appears to be limited to a relatively small subset of Windows 10 devices. You are at greatest risk if you have a machine that was previously part of the Windows Insider Program but was then removed from the program. The most likely time for this to happen was in late July or early August, after the release of the Anniversary Update.
And indeed, I encountered the failed update on two systems that matched that description to a T. Both had been part of the Windows Insider Program but were removed when the Release Preview build arrived and are now running the public (Current Branch) release, build 14393.
Update: Microsoft has now released a fix-it script. The Windows 10 1607 (RS1) Script fix to unblock update for Insider is a Microsoft Installer file that makes the same changes I describe in the next section, without requiring any registry edits or permission changes.
Microsoft says it's working on a fix. Until that fix arrives, however, you can minimize frustration by doing one of two things.
Option one: Block the update temporarily.
To do that, download and run the Windows 10 "Show or hide updates" troubleshooter. In an ironic coincidence, I posted how-to instructions for this tool on the same day that the troublesome update was released. (See "Windows 10 tip: Hide unwanted drivers in Windows Update".)
The update, KB3073930, is available from this Microsoft webpage. Run the wizard, then choose Hide Updates, and select the KB3194496 update from this list.
Finish the wizard and you'll be spared from this update for a few weeks -- presumably long enough for Microsoft to fix what's wrong. When the update is re-released, it should automatically appear. To remove the update from the "hidden" list so that it appears in Windows Update, run the troubleshooter again and choose Show Hidden Updates.
Option 2: Configure the system to process the update.
The cause of the bug is an obscure scheduled task intended to save Xbox Live games. Even if you've never played an Xbox Live game, this task is still there, and something about it is causing the cumulative update to choke.
Running the Microsoft-supplied script removes those blocking tasks, and has the same effect as the following manual steps:
1. In File Explorer, open C:\Windows\System32\Tasks\Microsoft. (You might need to click a consent dialog box to gain access to this folder.) Delete the entire XblGameSave subfolder.
2. Using Registry Editor, delete the following key:
Delete that key, which will also delete any values and subkeys associated with it.
Now re-run Windows Update and allow the cumulative update to install. It should successfully complete. You can confirm by looking in Settings > Update & Security > Windows Update > Update History. Here's what one of my test systems looked like after I made those modifications following two unsuccessful installations.
I hope Microsoft will publish a post-mortem after this incident is resolved so that its customers can learn what the company is doing to prevent similar incidents in the future. One encouraging sign is that this issue was identified and should be fixed within roughly a week (assuming that a fix is published within the next day or two).
It's also worth asking why this trivial, consumer-focused piece of Windows is able to gum up enterprise editions.
Meanwhile, the snafu is more evidence that smart businesses should be using Windows Update for Business to delay updates by a week or two. That's the surest way I know to avoid being bitten by a future defective update.