According to an internal document procured by Joystiq, the next major Xbox 360 dashboard update will introduce support for USB mass storage devices ranging from 1GB to 16GB in size.

Credited to a senior software development engineer at Microsoft, the document specifically reads that “increased market penetration of high-capacity, high throughput USB mass storage devices, a 2010 Xbox 360 system update.” Adding credence to the report is a screen cap above, which depicts a dialog box for formatting such devices from within the Xbox 360 Dashboard interface.

The size limitation leaves us somewhat perplexed, considering there are USB flash drives out there that eclipse 32GB in storage capacity. We suppose not imposing a size cap could potentially cut into the profit margins of that oh-so lucrative 360 hard drive market. Can’t have that. Regardless, though, it will certainly serve as an affordable alternative to Microsoft’s own branded Memory Units. Although this move may be foretelling of plans to ditch those completely.

While there’s no concrete word on when the update will drop, the general consensus remains as this spring.

Xbox 360 gaining USB storage support in 2010 update [Joystiq]

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