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wholikeswood said:




There is a 50mb software package that powers some of Natal's magic, which raises concerns that original Xbox 360 Arcade units wouldn't have the storage availability to use Natal. Greenberg assuaged our concerns, reminding us of Microsoft's NXE outreach, offering a free 512mb Memory Unit or a discounted hard drive. "It's kind of like the digital TV conversion you know, [subsidizing] the box," Greenberg said. "We did that with the New Xbox Experience because it did require some space and so we feel like now we're in an environment where we feel like we're fine."

http://www.joystiq.com/2010/01/09/greenberg-millions-of-natals-in-consumers-homes-this-holiday/


This is going to limit the sales of Natal and increase the costs for MS.  Not good news.