The Xbox 360 launched with memory cards, but soon ditched those in favor of standardized external memory. Unfortunately, the Xbox One won't have support for the latter at launch.
During a PAX podcast, Major Nelson revealed that the Xbox One won't support external storage at launch. In other words, you'll only be able to use the included 500GB internal hard drive at launch. Once the feature is added in, however, Xbox One owners will be able to install games and other content to external memory.
So, when can Xbox One owners expect to see external memory support? Nelson didn't have a concrete answer. He only said that support won't be there at launch due to the Xbox One team working on other things at the moment. The best we have is that external memory support "is on the list" of things the team is working on.
The included 500GB internal hard drive will last most gamers for quite some time, but the digital future outlined by both Microsoft and Sony will require more than just a paltry 500GB of memory. The internal hard drive included with the Xbox One can't be replaced so some gamers will need that external memory support. That's why we're likely to see it added in by the end of the year.
As an aside, Sony is continuing the policy it started with the PS3 by allowing users to replace the PS4's internal hard drive. In fact, it's the only next-gen console to have such a policy. Both the Xbox One and Wii U require users to utilize more external hard drives. Both internal and external hard drives are priced similarly so neither console has an advantage in price when it comes to memory expansion.[Image: Xbox Wire] [h/t: Eurogamer]