Microsoft is going to start loosening the restrictions on file sizes for XBLA games. Originally, the cap was set at a paltry 50MB -- with some exceptions made on a case-by-case basis. But the on-going success of XBLA, tied with the continuously growing interest indie developers have on the platform, has convinced Microsoft to raise the file cap. Going forward, the cap will be raised to 2GB, which will give developers much more leeway to work with.
2GB seems to be about the maximum hard-set cap that XBLA will handle for titles. Unless there is a great deal of re-working, it looks like the cap will stay at the 2GB mark for sometime to come.
To handle the increased file sizes, according to unnamed sources cited on Fudzilla, hard drive sizes will be increasingly edging towards the higher end of the spectrum, while the smaller 60GB models will not be restocked, destined to become a thing of the past. Over the course of next year, it seems that Microsoft could be releasing 250GB -- or even possibly, 320GB models -- to help all folks out with the constantly ballooning size of games. Not of course: for now, these can only be taken as rumors.
The raise of the XBLA file size cap might be in part to the recent success of the game Shadow Complex (check out our review here). While that game came in under 1GB, it will still undoubtedly pave the way for more ambitious (and larger) XBLA titles that will push the boundaries on what people normally expect from XBLA games.