Xbox Switching to USB Storage
The Xbox 360's annoying memory cards may soon be forgotten: the company is preparing a system update that will enable the system to store data on USB drives.
Now the bad news: you'll only be able to store 16 GB of game data per USB drive, and you'll only be able to plug in a maximum of 2 drives. Of course, the more enterprising among you will figure out ways to bypass the 360's artificial storage cap, but for the rest of us it means we won't be able to plug external hard drives into our 360s.
Microsoft is doing this because they want to continue to charge for that storage space - that's why the Elite costs so much more than the Arcade. If you could just buy an Xbox 360 Arcade then get a deal on a Seagate hard drive, Microsoft would lose all that money.
Still, two 16 GB drives is a whole lot better than memory cards, and those puppies also represent a nice storage upgrade for any Xbox 360 model. We also think this update supports the Xbox 360 Slim rumors. If Microsoft didn't make this change and tried to release a smaller Xbox 360 with no hard drive, consumers would balk. With this change, Microsoft will be free to slim that sucker down.
-calimer