After learning that the New Xbox Experience and Avatar customization would require, at minimum, a 256MB memory card, it spawned more questions than answers. Would the NXE install take up all 256MB? If so, what about Xbox 360 Arcade owners and their tiny 256MB memory card? Wait, what about Core customers who don't have storage or own a 64MB memory card? What are they to do and is the NXE update a mandatory download? CONFUSION! So, we reached out to. Major Nelson and, thankfully, he cleared up said confusion ...

"The new Xbox experience will require 128MB of free space. A hard drive is recommended for the optimal experience, to take advantage of some new features, and to be able to enjoy the great movies, TV shows and games available on Xbox LIVE. While we expect the majority of consumers to download the New Xbox Experience without a problem, a small percentage of Xbox 360 owners do not have enough memory to accommodate the update. To help ensure all Xbox LIVE members are able to download the New Xbox Experience and enjoy its new features, Microsoft will be offering storage solutions to the Xbox LIVE community. We are not sharing details of this offering yet. Be sure to check xbox.com for more details in the coming weeks."

There you have it. The NXE is a required dash update, will need roughly 128MBs of storage, a HDD is recommended AND (shocker here) for those who own little or no 360 storage, Microsoft will be offering some sort of "storage solution". We wait for more info ...

http://www.xbox360fanboy.com/2008/10/10/ms-to-offer-nxe-storage-solutions-to-those-in-need/

For the sake of Arcade owners, I hope Target still has some of those $25 20GB hard drives left.

MS will be providing their new "software-only" storage upgrade technology as a free download.

I'm guessing that MS is planning to heavily subsidize purchase of either an HDD or large-capacity memory card for those who currently have no HDD.

This does raise an interesting question... is MS going to start bundling some sort of additional storage with the Arcade (above and beyond the 256 MB card)?

I dunno, if the update only takes half of that then 128mb is still a lot of game saves.  I use a HD for DLC & the like but I also have a 64mb card I bought for save games that I use for LAN's and going over to friends.  I haven't had a real issue with space yet.

I am interested though to see what kind of "solution" they come up with.

They'll probably mail people a 256mb memcard as long as they provide a console S/N that was bundled with either 64mb or 128mb memcard.

bitmap has got it

micro will ask you to pay for a small price a 256 meg memory card to enjoy the new xbox experiance, unfortunatly those who may want to watch hd movies will have to buy a new hardrive

I thought Bitmap said MS would mail it out, not that MS would charge a small price for it.  I'm thinking there won't be any charge as long as a person can provide a serial number.

Well, as for future of the Arcade, couldn't they simply stick the NXE on a memory chip inside the 360?

Wouldn't it be funny if they already had on the new units, and it just had to be activated?