MARCH 28, 2011 • Via a future Dashboard update, Microsoft Corp. is planning to add 1GB of storage space to Xbox 360 discs. Currently the maximum game data allowed 6.8GB of space out of a potential of 7.95GB. The rest has been reserved for DVD video and security sectors. The extra space will be useful to game developers who often have to squeeze their game data to fit onto console discs.

Impact: In the age of digital distribution and cloud gaming services it is ironic how Microsoft is struggling to squeeze extra storage space onto its discs.  Xbox 360 games like Final Fantasy XIII have had to squeeze on three discs because Xbox 360 discs can hold nowhere near the 50 GB of PlayStation 3 discs.  The reality is 1 GB of extra storage is nothing these days.  More importantly it is an indication of how there is still a long way to go for full digital distribution.  Downloading a 50 GB game is a major pain.  However, it is the storage costs that are a back breaker.  A 250 GB hard drive for the Xbox 360 costs over a $100, but will only hold a handful of full games.  It will be a while before 50 GB of storage is as cheap as it is on a disc.