Puffy,
All that statement says is that games need to load effeciently w/o the HDD. i.e. Don't make your game so dependant on the HDD for caching loads to reduce load time that gamers w/o a HDD suffer through unrealistically long load times.
Epic stated they knew for a while not to expect the HDD.
The question becomes: Can a developer create a game that requires the HDD to function.
The fact the 360 is going to have MMOGs, I think it is a given there will be games that require a HDD and online access (similar to past gens that required a light gun, rumble pack, power pad, or whatever to work).
We may not see any at launch, but at some point a company like Square is going to want to release a game that needs a HDD.
The saving grace for MS in this situation is 1. the HDD is available AT LAUNCH 2. Xbox developers are familiar with it and will probably utilize it to some degree 3. the HDD is a goo deal compared to the mem card and will spur on decent enough sales and 4. I am guessing the major SKU available this year will be the HDD SKU. I would not be shocked if come Fall 2006 50% of Xbox owners had the HDD.
That would be a pretty big foundation and allow some developers to take a risk at requiring a HDD. More "hard core" & online gamers will tend toward the HDD, so a game that is more "Hardcore / Online" oriented they probably would not hurt sales too much by focusing on this demographic.
But if it were me, knowing that A.) probably less than 50% of total Xbox customers will ever own a HDD and B.) the PS3 wont have it standard either, well, for pure economically reasons I would make my game w/o the HDD in mind.
If you are a cross platform developer you need to hit the minimum standard. Standard or not in the Xbox, it still could not be counted on in the PS3.
The good news is next-next-gen mass storage media should be a lot cheaper. With flash reducing 40-50% every year I could see 32-64GB flash memory going for $100ish in 2010/2011. That would mean realistically one could get in bulk 16GB in the $20-$30 range AND with the promise that it would continue to drop in price year after year.
Of course consoles in the 2010-2012 range will have 2GB-4GB of memory
Now that I think about it we already are seeing a snap shot of that time frame... Intel just announced a 1.3B transistor CPU for the server market. That is about the projection of the Xbox 3 CPU. We already see servers with 4GB of memory. With multi-die arrangements and scalable architectures like GPUs (not to mention 45nm looking really promising, maybe even early!) I see no reason why the next gen cannot be as big of a leap as this one is. Which is not huge, but a massive quality evolution for the better!
With that evolution hopefully comes a cheap mass storage medium so everyone is on board from day one next time.
Worse case? MS's Xbox 360 HDD can be used in the Xbox 720
W00t detatchable HDD!! Now if they had only done this with the Xbox1 you guys would be happy!!