With the latest launch of the new Xbox dashboard, Microsoft had increased the storage of the USB Flash Drive option to 32GB. Originally, the 360 could only store up to 16 GB on a USB Flash drive which was implemented in 2010.
When 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 said, “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.”