Microsoft locking out unauthorized Xbox 360 storage devices

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Last week I told you about the upcoming preview program for the next Xbox 360 update. This is the update that adds Twitter, Facebook and Last.fm to the Xbox 360 experience. All good news (or at worst, neutral news), right?

Well now the other shoe has dropped, so to speak. In a post on the Major Nelson blog, Xbox's Larry Hryb reveals that this next update will lock-out unauthorized storage devices.

A little background on what this means. The Xbox 360 comes in two (currently) SKUs, one with a hard drive, and one without. The drive-less Xbox 360 Arcade unit is cheap ($199) but to realistically use it, you'll need to buy a "Memory Unit" (basically a proprietary USB stick) or an Xbox hard drive to store your save games, Xbox Live profile, and so forth. Some owners with a hard drive also use a Memory Unit to back up their data, just for the sake of security or in order to take the data to a friend's Xbox 360. A 512 MB Microsoft branded Memory Unit goes for $29.99 at BestBuy.com. A 2 GB third party Memory Unit from Datel goes for $39.99, and the Datel unit is expandable using microSD cards. Which would you buy?

If you bought the Datel and it's full of data, between now and the launch of the new update you're going to have to run out and buy 4 of the Microsoft units at $29.99 each, or more likely, pick up the $99.99 60GB Live Starter Pack for Xbox 360. Talk about tough love from Microsoft. It'd be one thing if these 3rd party memory units were only available from some obscure online site that sold console mod-chips and other dodgy items, but how many consumers walk into Best Buy completely oblivious to the fact that Microsoft even has a licensing program and just buy the Memory Unit that appears to be the best value? Guess Microsoft will see a nice up-tick in their notoriously expensive hard drive sales, but at what cost in consumer loyalty?

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