So, just what is going on here? Are games being compressed and decompressed on the fly? The answer is no. For some time, I've been looking at the size of the actual game data by running debug review code on a 360 test station, where most of my Xbox gaming takes place these days. The sizes we're seeing with the new NXE installs correlate very closely to what I've been seeing on the test kit, which features its own minimalist dash that shows the total disk space occupied by the game code only.
What appears to be happening is that the new dash is simply much more efficient in terms of the amount of useless data it strips away from the disc before transferring it across onto HDD in whatever the 360's internal equivalent of the ISO format is. The bottom-end install always used to be 3.4GB (exactly half of the usable 6.8GB on a 360 game DVD - not a coincidence) regardless of the size of the game itself, which makes me think that some of copy-protection system's filler bytes were being transferred in the old installation procedure. Additionally, some files may be mirrored in multiple locations on the disc in order to speed up access times. This duplicated data can be easily eliminated for a hard-disk install with no untoward effects on game performance.
All of which is obviously fantastic news, especially on a system with (for now) limited storage upgrade potential. Based on some of the lists appearing online, chances are that 120GB hard disk owners should be able to fit a few more games onto their drives, while 20GB HDD owners won't be quite so pressed for space by using the installation feature. It also means that the forthcoming Games on Demand feature will be using the same system for smaller downloads (although curiously, one confirmed GOD - Crackdown - still won't install in its disc-based incarnation).
In terms of other optimisations, tweaks and speed improvements the dash offers, owners of the Jasper unit with the embedded 256MB or 512MB of flash RAM see impressive speed increases when transferring across their gamer profiles from the hard disk to the internal memory, according to several reports online. As luck would have it, I registered my Jasper for inclusion in the trial so I could give this a go (well, "luck" is the wrong word - it's the only retail 360 I have left in a working state). The process is swift, painless and does indeed make navigation of the gamer profile on the dash much more rapid. Come 11th August, give it a shot and see what you think, if you have the requisite hardware.
However, despite the marked improvements across the dash as a whole and the bonus space-saving features of the hard-disk installation option, there's still plenty of work to be done in improving the overall package the interface offers, if only in getting promised functionality delivered or indeed working.
For example, lack of social networking features aside, the potentially very useful Games on Demand option is included in the update, but right now it's just that the old Xbox Originals tag has been changed. That's it. There's no new content at all, which is somewhat surprising considering that the games in the proposed GOD line-up are so old.
Additionally, as mentioned in the first video, Microsoft's attempts to break out of the HDMI spec and offer greater compatibility options for those with digital displays seem to have made little impact whatsoever and in all my testing I couldn't actually find any use whatsoever for disabling or indeed enabling the new Display Discovery feature.
The theory as I understand it is pretty straightforward. The Xbox 360 and display handshake digitally, with the screen telling the console what resolutions it supports (via its internal EDID, which stands for Extended Display Identification Data). Now, while most HDTVs on the market are optimised for 720p, they do not actually have native 1280x720 resolution, usually opting for 1360x768 or, in the case of a vast number of 22" displays (like the Samsung HDTV I have in the bedroom), 1650x1080. All of these native resolutions are supported by the Xbox 360 via its excellent scaler, but only if you have a DVI monitor. Looking over the changelog, the implication seems to be that disabling Display Discovery gives you access to the raw resolutions that you can set as you please.
The reality is somewhat different. My Samsung display still only offered up the usual 480p, 720p, 1080i and 1080p resolutions as selectable options. So did the configurable HDTV EDID emulation box I use to convince HDMI devices that my capture system isn't a DVI monitor. So did the main plasma in the lounge. Indeed, even using an HDMI-to-DVI cable and using the DVI socket on my Samsung monitor, I still couldn't get the DVI resolutions on-screen.
So, why is this an issue? Well, the fact is that, particularly on cheaper or older displays, the Xbox 360 does a far superior job of scaling the image than the screen does. Not only that, but it does so more quickly too - flat-screen displays can add anything up to five frames of lag in their processing (around 80ms), and a couple of those frames could be directly attributable to scaling the image. While I'm sure the new mode will fix some minor compatibility issues, it should be capable of doing so much more if properly implemented.
Other disappointments come down to the lack of innovation in other areas. The h264 decoder built into the 360 lags behind the PS3's in terms of performance and spec, and there's still no support for the Matroska .mkv file format. While it is mostly known for being used in illicit HDTV downloads, it is also the container of choice for the new HD iteration of DivX, so more than worthy of support. As it is, there seems to be a definite emphasis on innovating Xbox 360's video playback capabilities only in tandem with paid-for services, be it the US-only Netflix or Microsoft's own more foreigner-friendly movie-rental system on the Xbox Live Marketplace.
Overall though, the message is positive. This is a worthwhile upgrade even without the potentially showstopping functionality promised at E3 and due to arrive before Christmas. It's clear to see that the Xbox 360 interface is evolving and improving, and while there's a long way to go yet, it's interesting that what initially looked like being a smallish, incremental update still has so much going for it. As for the slightly more unsavoury elements of the Avatar Marketplace, the bottom line is that in the long term, the market will decide on whether the pricing will be a success for Microsoft, or whether the costs will adjust to boost download numbers.
The summer 2009 Xbox 360 dashboard is currently in an closed beta preview phase and rolls out to all Xbox Live members on 11th August.