Our buddies over at Joystiq uncovered some juicy documentation regarding Microsoft's Spring 2010 update to the Xbox 360 Dashboard, specifically that the console would now support external USB hard drives. Yup, you'll soon be able to store DLC, saved games and Arcade titles on an external, USB HDD of your choosing.
Don't get all that excited, however. Microsoft is too smart to pass up on the lucrative profit margins that current 360 hard drives provide and have put some limitations on how the drives work. Drives used with the 360 will have its write-capable space limited to 16 GB. Anyone who bought an early 360 Pro with a 20 GB drive will be able to tell you how much good that is for any serious gamer.
This seems to be more like an expansion/replacement of 360 memory cards, which are probably a product MS doesn't sell a ton of anyway. That, or Microsoft figured out that they may be losing Live Marketplace business on Arcade owners who refuse to pay the exorbitant price for a 360 HDD.
Ultimately, this isn't the earth-shattering news I was hoping for, but I'm sure there are people out there happy to hear it.
Xbox 360 gaining USB storage support in 2010 update [Joystiq via Engaget]