It's kinda hard to believe but a new technology Seagate is working on could deliver 300TB 3.5-inch HDD within a few year. The heat-assisted magnetic recording (HAMR) technology will allow storage of up to 50TB per square inch of drive space, which is a lot more than current HDDs.
The technology is expected to become commercially viable in a scant three years, by 2010. This means we may be seeing the Xbox 720 and PS4 being entirely based around digital distribution or fully installed console games, mostly eliminating ugly load times and noisy disk drives. With that kind of space, we may never have to worry about filling it up; 300 TB can hold around 6,144 50 GB Blu-ray disks (or the entire Library of PS through PS3 games that could ever be created with room to spare).
Update: After reading the article on Wired it looks like Joystiq messed up a bit. The article on Wired says: "Seagate plans to hit the market with twin technologies that could fly far beyond, ultimately offering as much as 50 terabits per square inch. On a standard 3.5-inch drive, that's equivalent to 300 terabits of information, enough to hold the uncompressed contents of the Library of Congress"
So it's not 300TB but 300 terabit which is equal to 37.5TB (terabyte).
Update2:: The timeframe is also wrong. No 37.5TB by 2010, more like 3000GB.