Joystiq's industry spies have turned up a document revealing that "USB Mass Storage Device Support on Xbox 360" isn't just something PS3 fanboys like to post derisive comments about. According to the document - subsequently confirmed by two separate sources - the "increased market penetration of high-capacity, high throughput USB mass storage devices" has prompted "a 2010 Xbox 360 system update" to allow users to save and load data from USB devices.
That includes XBLA games, DLC, title updates, as well as game installations. "USB storage devices may, however, have far greater memory capacity than MUs (at the date of writing, the largest MU is 512 MB), and may therefore support previously infeasible operations-such as installation of a full disc-based title."
There's a small catch, of course. The console has an artificial cap of 16 GB of usable space per USB connector, and will read a maximum of 32 GB over two devices at any one time. Each device must be at least 1GB in size, of which the system partition occupies 512 MB. So, no matter how big your USB drives are, you can only use two at a time, with a maximum of 16 GB per USB connector.
The update is apparently due out in spring (our winter), so expect this quite soon.
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