Apparently Microsoft is sick of taking your money making you buy their awesome MU's, so in an update that is coming in Spring 2010 they will be giving the Xbox 360 support for USB mass storage devices.

Source: Joystiq
 
You'll be able to download things like game saves and whole XBLA games straight on to the memory stick, as well as install full games onto them as if it were part of your hard drive. Still requiring the disc in the tray to authenticate it will be just like the current feature. 
 
There is a 512MB minimum space requirement on the card that the Xbox will require for system type things and a maximum limit of 16 GB.  When you first place the USB stick into your system it will ask you if you want to use the whole stick or if you want to save some of the space on it for personal things like music or porn. Apparently you will be only be able to connect a maximum 2 USB sticks to the system at a time even though there are currently 3 USB ports on the machine.  Which means a total 32GB of extra storage on top of your measly 20GB hard drives.
 
There were pictures leaked of a possible slimmed down motherboard for the 360 which could possibly mean that the console is getting a whole makeover pretty soon.  And with the removal of the MU from the shelves it could mean they would totally remove the slot from the future console design.
 
Pretty awesome I would say, although it makes me mad I purchased a MU like 2 months ago just to bring my profile to my friend's house.

awww. 16 gb max? I have a 500 GB hard drive :( 

Bout time.

Sorry if I missed it in your write-up, but does this mean any USB drive, or is is MS going to put out some kind of 360 branded flash drive that costs 5x as much as an equal sized drive?

If it's the former, that is fucking awesome. If that means you could install games onto the flash drive then be able to play installed games off the drive, I would be so happy. My 20gb HD has felt so cramped since installs came out.

I like the idea of installing games on usb drives.  I only have a 20 gig hard drive and I'm not about to pay $160 for a 120 gig drive.
 
Too bad about the 16 gig limit though.  Otherwise you could just drop 100 bucks, get a 500 gig portable hard drive and hook that up and never have to worry about space again.

Holy shit, this is huge!  Memory Units are now rendered irrelevant!

16 gig limit on 1, you can use 2 to achieve 32gigs and you can just format multiple ones and swap then out as needed, I have loads of usb sticks laying around, enough i can just install a game on each one and do other stuff with it and swap it out as needed.

Anyone else worried about hacked gamesaves and hacking?

A 16 gig cap? I was excited until I read that.

" Anyone else worried about hacked gamesaves and hacking? "

ive been happy all day after glancing over this story before going to work.....now i read 16gb limit :( 
 
id just hoped to install everything to my 160gb external... 
 
one day il live outside the bounds of 20gb.........one day.

The 16gb thing isn't too bad, because you can have 2 hooked up at once for 32gb, in addition to the 20 you have, plus you can always have 4 or 5 usb keys and swamp out as needed. Not ideal, but when you can pick up a 16gb usb key for $20, it's a hell of a lot better than the 120gb hard drive.
 
Want to bring all your Rock Band songs and your gamertag to your friends place for a Rock Band party? No problem...

THIS IS AWESOME!! I can put my Arcade Games on my USB sticks now!! Well, my One Arcade game... but still!

" awww. 16 gb max? I have a 500 GB hard drive :(  "

I just thought of another use for this - storing DLC! I have 3 Fallout 3 DLCs and all the Fable 2 DLC. I can sore them on my 4 GB stick!

" @jaklap said:

" Anyone else worried about hacked gamesaves and hacking? "

Already been around since 06......so... yeah.. "

dang i got excited about hearing this until 16 gig. come on, give us more than that. i was kind of excited to get like a 1tb external hard drive. 
 
didn't microsoft release a patch that made it so people couldn't use hacked hard drives? what was the point of that if they are now letting people use usb hard drives.

bout f*cking time. My hard drive is almost full.

Won't really mean shit to me. would have helped back in 05 when the 360 came out... I have a 120gb 360 hdd, 2 20gb 360 hdd's, a 1.5TB external hdd, 750gb external hdd, and a 250gb external hdd. 

Wish the cap was higher, but hey, it's somethin'.

It's fairly useless considering the rumor says that the limit will be 16GB. If it's really limited to two sticks at a time (a very arbitrary limitation if you ask me), it's even worse. I guess it's good that I might finally be able to install a game and still maintain my library of Arcade and DLC titles.

hey microsoft a tip next time you let us use are own hard drive or yours. ok i want to use my 1 terabyte one.

I kind of hope the same update comes with the option to keep auto-updates downloaded permanently. It's kind of annoying having to redownload those every time some new DLC comes out or I want to go back and play an older game again, especially now that pretty much any new game has a day 1 auto-update anymore. Those things are so small they can't take up that much space.

" It's fairly useless considering the rumor says that the limit will be 16GB. If it's really limited to two sticks at a time (a very arbitrary limitation if you ask me), it's even worse. I guess it's good that I might finally be able to install a game and still maintain my library of Arcade and DLC titles. "

This is a nice move on Microsoft's part.

" @AndrewB said:

" It's fairly useless considering the rumor says that the limit will be 16GB. If it's really limited to two sticks at a time (a very arbitrary limitation if you ask me), it's even worse. I guess it's good that I might finally be able to install a game and still maintain my library of Arcade and DLC titles. "

I'm still rockin the 20 gig, so two 16s will more than double my storage :P "

Don't listen to me. I'll complain no matter what they say until they drop the freaking price of their drives in line with todays standards.

" @AndrewB said:

Don't listen to me. I'll complain no matter what they say until they drop the freaking price of their drives in line with todays standards.

I feel ya. Yer right, it's not elegant and far from perfect, I just think it's better than what I was expecting them to do - which was nothing :) "

Being limited to 16gb per stick is a little disappointing, but it's still something.  I like the idea of keeping game saves and arcade titles on my 360 20gb HDD and downloading demo's and installed games, etc to my memory sticks.  I won't need to buy a bigger HDD thanks to this addition, unless I want to install multiple games at a time, which isn't really necessary.

i just wish they would bring back ipod support. i still cant get my fucking opid touch to work with it

Indeed. I guess the real solution will only come with the next Xbox console. 'Till then, I'll probably pick up another 16 GB stick so I can install more than one game at a time, if that. "

Sweet

wake me up when i can hook up a 1tb hard drive.