The fine folks at Joystiq have corroborated with two outside sources, confirming that “USB Mass Storage Device Support on Xbox 360” is coming this spring via a firmware update.  The update will allow Xbox 360 users to transfer Xbox Live Arcade games, Xbox Live Indie games, Games on Demand, DLC, and game updates to an external storage device.  According to the leaked Microsoft documentation, the external device must be at least 1GB in size with space for a 512 MB system partition.  After you insert the storage device into the 360,  a prompt will give you two options: “configure now,” which completely wipes the device and caps 16GB of space for game file content and “customize,” which readies the device for game files and allows you to keep non-game files on it such as music.  So what can we deduce from all this?  It looks like the Xbox team is willing to pull out of the Memory Unit (MU) business and finally allow its customers to use their own external storage devices, an ability PS3 users have had since that console’s introduction in 2006.  Also, with recent chatter that a slimmer Xbox 360 is in the works, the design team may opt to remove the MU slots entirely.  Sure, 16GB of external space (or 32GB if you choose to insert two USB devices) isn’t much, but at least it’s a step in the right direction.  Hell, that much space allows for “previously infeasible operations such as installation of a full disc-based title.”  Full games on the go sounds nice, now doesn’t it?  (Disc-in-tray authentication is necessary, of course.)

UPDATE: Microsoft’s Major Nelson has confirmed USB mass storage support is coming to Xbox 360 via a system update on April 6.

[Via Joystiq]