update for Fall 2012 quietly increased the flash drive storage capacity from the 16GB implemented in 2010 to 32GB. Although we had been made aware of this the week of the update, we just wanted to make sure this wasn't a glitch that would be reversed at a later date.
Asked if the Xbox flash drive storage limit had officially increased from 16GB to 32GB during the most recent Xbox Live update, a Microsoft spokesperson told us, "Yes. The more our customers use their profile and download digital content, the larger the file size necessary to store that content and move it between consoles gets. Therefore we increased the size of the memory to enable our customers to take more of their Xbox profile with them on the go."