Microsoft has confirmed that a new Xbox 360 System Update has gone live. The update adds support for USB storage devices for game/profile/content saving. The update is mandatory, meaning you won’t be able to sign in to Xbox Live without it.

Once you download the update, you can connect your USB flash drive to the system and go to the memory section. Here, you can conduct a one time performance and integrity check to make sure the drive is working properly. You will also be able to configure how much storage can be used on the drive up to 16GB, with the remaining drive space usable on your PC or Mac. However, you can use up to two USB flash/hard drives to create 32GB of storage space.