In an unsurprising move (and already a precedent set by Final Fantasy XI, but ignored since), Microsoft confirmed at its Gamefest 2007 that studios working on server-based titles for Xbox 360 are allowed to require the hard drive for their games to run. Games allowed to participate in server-based's "bent rules" is decided on a case-by-case basis.
Microsoft will be asking developers to come up with a set amount of hard drive space to set aside for each game. For example, if World of Warcraft came to Xbox 360, Blizzard would have to tell Microsoft "the game's going to need 4GB of space," even if the game won't necessary install 4GB of content at the start.
"We can't guess how much space you're going to need for your updates, and, if anything's going to keep you from expanding indefinitely, it won't be us, as much as market forces," said Ian Lewis, software design engineer at Microsoft. "Feel free to require 30GB for your game; that's just going to make your potential audience a lot smaller."
The requirement is primarily linked to hard drive limitations. "It's the consequence of having a limited size hard drive, with a lot of other things to fill it out," he says. Companies are allowed to expand the required size, but the game should always run on the original requirement -- users have to approve the change. If the requirement goes up, Microsoft is playing with the idea of allowing the ability to degrade -- those are Microsoft's words -- the experience. Their ideas, straight from their presentation: