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You can buy an external hdd too if you want to install your games or download a lot of xbla games.

You have to partition the hdd and the parts you partition for the 360 can't be used with a PC but its still a lot cheaper than buying the Microsoft brand ones. My friend bought a one terabyte external hard drive and partitioned half for his 360 and half for his PC. I'm not sure how he did it but he said its pretty easy.

I think Amazon had a terabyte hdd on sale for 50 dollars today too.



                                           

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