Microsoft announced the next Xbox 360 software update will ban "unauthorized" storage devices on the console. The reason for this sudden move is unknown, but it seems pretty lucrative as this will force people to buy the official Xbox 360 512MB flash drive which sells for a whopping $29.
“When Preview Program members start receiving the Xbox 360 system update next week, one of the changes is that unauthorized memory units will no longer work with the Xbox 360. If you’ve moved your profile or saved games onto one to “back it up,” you’d better move it back onto an authorized Xbox 360 storage device prior to taking the update,” the official Xbox 360 blogger Major Nelson wrote.
Microsoft Xbox 360 game consoles are equipped with USB ports, thus, theoretically support all available flash USB memory sticks. However, Microsoft plans to limit support of memory sticks to only “licensed” devices. For example, Xbox 360 512MB memory unit costs $29 from Microsoft, which is a very high price for a 512MB USB flash stick.