As you can tell by the beautiful watermark Joystiq was sent photos of what appears to be USB storage compatibility on the Xbox 360. Joystiq’s story says that plugging an external USB Hard Drive storage into the Xbox 360 will allow you to use the external drive to save demos, game saves, Xbox Live Arcade titles, and rip retail games. No more clunky overpriced proprietary HDDs for you! No sir. The update is reportedly due this Spring.
These pictures come hot on the heels of the leaking of photos of a smaller form factor motherboard for the Xbox 360 and Steve Ballmer’s recent comments that the Xbox 360 could get “slimmed” ala the Playstation 3. Once we or Joystiq, or anyone really gets confirmation of these details we will be sure to pass them along.
UPDATE: I just want to clarify something, USB HDD is not the right terminology here since it appears that anything over 1GB will work, so I assume that would also mean high capacity flash drives which is just ridiculous awesome when you think about it.