Microsoft raises the cap to make USB sticks a more viable storage option.
The accessible storage of a USB device on Xbox 360 has been doubled from 16GB to 32GB in the new dashboard update, users are reporting on NeoGAF.
Since USB storage was introduced users have been limited to only 16GB of usable space, no matter the capacity of the device.
The increase in usable space will be great news to gamers using an Xbox 360 without a large hard disc drive.
We've checked with Microsoft to confirm reports.