Edit: The update is live. Back in March we announced the Preview Program would expand to the Xbox 360 and work much like the Xbox Insider Program – selected members would be able to sign-up directly from their Xbox 360 and once registered, have the opportunity to install system updates and experience the new or improved features before they release to the general audience. One of the most requested features at the Xbox Feedback website was for larger external storage for the Xbox 360. The next update for Xbox 360 Preview Program members will allow the use of 2TB hard drives to store Xbox 360 data. If you are not part of the Preview program you will get this functionality later this year. In addition we will also no longer reserve space in advance on your hard drive. If you are using 16GB of hard drive space for games – we will only take 16GB of space. And just like today – you will be able to use two external drives at a time. Note: Some drives may be incompatible or have performance issues. If you already have space reserved for storing Xbox 360 data, you will need to clear the Xbox 360 storage to gain full access to the drive. If you are in the Preview program, please review the list of known issues before formatting your drive. As a reminder, the best way to recommend changes and improvements to the Xbox One or 360 is through the Xbox Feedback website. We appreciate your feedback and continue to work on improving the Xbox experience. Source Xbox 360 System Update for Preview Program Members - Now Supporting 2TB Hard Drives - Xbox Live's Major Nelson It`s a good thing that Microsoft is supporting this.My 500gb drive has less than 35gb left.