The 500 GB internal storage featured in the Xbox One will be non-removable and non-user serviceable, and the three USB 3.0 ports will allow for external storage, Albert Penello, senior director of product planning at Microsoft confirmed with Engadget.
In comparison, the hard drive installed in the Xbox 360 is user serviceable and replaceable. According to Penello, external storage via the new console's USB 3.0 ports can be used for storing everything that the internal hard drive can, including downloads and game installs.
In order to play a game, Xbox One will require users to install games from the disc onto the console's HDD; however, the console will allow gamers to play games as they are installing. Xbox One will also allow updates for games and apps to install in the background while a game is being played.