In looking at the specs for USB 3.0, the potential is truly tremendous, and assuming it is fully backward compatible with all USB devices, this will potentially have heavy implications for gaming.  With such fast upload/download speeds, most current generation software would be able to run off a USB device with no problems, and with the sinking cost of storage, this would be a huge benefit.  Can you imagine games coming on a small USB device???  It would reduce cost of packaging, provide far more shelf space for retailers to display more products, and reduce power consumption of current optical media devices.  There are probably more benefits and cost I am sure, but the potential is huge for this.

http://news.cnet.com/8301-11386_3-10141810-76.html?tag=TOCmoreStories.0

"The most salient benefit of SuperSpeed USB is the 10X improvement in data transfer speed over current USB, version 2.0. So, for example, transferring a 25GB HD movie will take 70 seconds instead of almost 14 minutes.

Transfer of a 25GB HD movie:

• USB 1.0: 9.3 hours
  
• USB 2.0: 13.9 minutes
  
• USB 3.0: 70 seconds

Intel demonstrated a working version of USB 3.0 at the Consumer Electronics Show in Las Vegas last week. Here's why it will make eSATA and FireWire obsolete. When USB 3.0 is expected to hit the market in early 2010, it will have been 10 years since the now ubiquitous USB 2.0 was introduced (April 2000). The current USB 2.0 specification runs at a theoretical maximum speed of 480Mbps, and can supply power (for those looking for the hard details, you can find the USB 2.0 specification here (zip file). According to the USB Implementers Forum, there were 2 billion USB 2.0 devices shipped in 2006 (one for every three people in the world), and the install base was 6 billion (almost one for every person in the world). In November 2007, the USB Implementers forum announced the USB 3.0 specifications, and Intel officially demonstrated the technology at CES 2009. Now, the juice: USB 3.0 promises a theoretical maximum rate of 5Gbps, meaning it's 10 times faster than USB 2.0. USB 3.0 is also full duplex, meaning it can upload and download simultaneously (it's bi-directional); USB 2.0 is only half duplex. Put side by side with eSATA and FireWire 800, USB 3.0 is far superior. eSATA, an external connection that runs at the same speed as the internal SATA 1.0 bus, has a maximum theoretical of 3Gbps. This makes USB 3.0 faster than eSATA and about six times faster than FireWire 800 (full duplex at 800Mbps). USB 3.0 also provides another advantage; while eSATA is faster than FireWire 800, unlike FireWire it cannot supply power. USB 3.0 has the advantage of being faster than both, even while supplying power. Finally, USB 3.0 has improved power management, meaning that devices can move into idle, suspend, and sleep states. This potentially means more battery life out of laptops and other battery-based USB-supporting devices like cameras and mobile phones. Of course, there are other factors to consider; the FireWire 3200 standard is also in the works and promises to allow 3.2GHz speeds on existing FireWire 800 hardware. USB 2.0 generally doesn't meet its theoretical maximum throughput, due to its dependence on hardware and software configuration, where FireWire gets much closer. It's hard to say whether USB 3.0's updated architecture will still use more CPU time than FireWire does. But in the age of powerful hardware (can anyone say "3.2GHz, quad-core CPUs"?), all of this means that FireWire is still not going to match USB 3.0's theoretical maximum of 5Gbps. The ultimate signal that this war has already been won is Apple's recent decision to ditch FireWire from its consumer line in favor of USB. Previously, Cupertino had been one of FireWire's greatest advocates. And surely the company will be one of the first to adopt USB 3.0. All in all, we can't wait for motherboard manufacturers like Gigabyte and Asus to start supporting the technology and mainstream PC builders like Dell to start integrating it into their products. Bring on the speed.”

I like the idea of USB games, that would mean no optical drives, less prone to failures.

I think next gen console will still have an optical dvd, but with the projected commercial release in 2010, this will be fielded tech in 2011, when the next box and wii 2 are released. Also, being a usb format, M$ could add it to a newer 360 slim or sony to a ps3 slim.

I'd prefer buying pc games that are stored on USB device over a disc.

packaging for games is REALLY very expensive, and that's why many gripe about no savings from digital downloads to retail prices.  Of course, stick drives are more costly than disc, BUT you can really decrease cost, if you mass produce them on the levels to support hundreds of millions shipped devices, and set them up for one-shot use, so people can't erase them and use it for something else...there are alot of ways to reduce cost for such devices, it's just a matter of having a reason to do so.

NO moveing parts! I often wondered why movies ans such already didnt do this? just cuz it was to slow to transfer the data? or discs are just really really cheap in compaison?

Wow 70 sec, thats... fast.

Part of it is cost, as disc are much older tech than flash memory, but part of it is also people sticking with what they have already got!  Disc work just fine, currently, so why go mess with a good thing...unless you have something much better to lower cost.  Cheaper packaging is such a cost driver, and as noteed in this article flash prices are tumbling fast:

http://arstechnica.com/journals/apple.ars/2008/11/05/dropping-flash-memory-prices-may-help-apple-bottom-line

I'm waiting for apple to stop shafting people and see them launch a 64gb ipod touch, to replace my 160gb ipod, so as more and more devices rely on flash, the prices will tumble, so that by 2010, 32gb of flash will be dirt cheap, and that would be sufficient to hold most games.  also...if your game needs more space, you just put it on a bigger drive, no added equipment cost.  no moving parts, less energy, less heat, etc etc...flash is the way to go.

The problem with USB 3.0 is that there is a new Firewire spec RIGHT around the corner that is even faster than USB 3.0. So before it exists, USB 3.0 is already obsolete.

edit - nm. apparently the 3.0 throughput is still higher,  or at least has the potential for such. Most USB doesnt reach its max throughput. FW 3200 will allow for 3.2 ghz even on older FW hardware.

Packaging costs are only around $1 per game (anyone can buy standard cases used by them for pennies) and DVD discs cost less than 10 cents for game companies. Manual is the most expensive part of the package (even very small manual), everything else cost pennies. So, it's not expensive at all. Although, there are other expenses which cost far more. For example shipping, retailers cut, taxes etc.