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Those in on the beta of the new Xbox Live Preview are reporting some significant decreases in file size of games installed directly to the hard drive.

Gamers describe conspicuous size reductions for games like Street Fighter 4, Left 4 Dead, and Bioshock with no performance decrease. For now, of course, you probably need a hard drive more substantial than the one I'm running (20GB) and the beta (I'm not on it) so I'm talking out of class here.

User dumlaox on the CheapAssGamer forums breaks it down pretty nicely though:

Good News: The new NXE produces smaller install sizes for disc based games. While you still need the disc to play the game from the HDD, the amount of space taken up by the installed game is smaller than before. Aside from The King of Fighters XII, the following were tested out for this quick evaluation:

-Street Fighter 4 - 4.6GB
-Raiden Fighters Aces - 484MB

Bad News: This change in installation size means that almost every game will have to be re-checked on the new NXE. Over 400 games being checked again doesn't exactly spell fun.

Good News: From what I could tell, the reduced file sizes don't seem to change the performance ratings from before. While this may mean that Halo 3 still runs poorly off of the HDD, it also means that not all 400+ games have to be checked for performance again. Raiden Fighters Aces and Street Fighter 4, for example, had the same performance ratings as before.

 

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This is a benefit mostly to those with large-size hard drives, but if you have a console with one, or have invested in an upgrade lately, it means good news in the future.

 

Source:  Kotaku