Gearbox president Randy Pitchford has confirmed that Borderlands on the Xbox 360 will require a hard drive to run as there is simply no way such a demanding game can run without one. Pitchford revealed that he doesn't know whether MS is going to complain about this requirement but once again stated the game certainly needs space to run.

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Because of the way the game procedurally generates everything from weapons to armor, Borderlands has different requirements from typical first-person shooters. "If it weren't for where the 360 and the PS3 have gone, with big hard drives, and lots of memory, and powerful processors, there's no way you can conceive of this as a console game," Pitchford said.
When asked about recent mixed statements from Microsoft about whether a game that requires a hard drive will be allowed on 360, Pitchford confirms that such a release is possible. "I don't know if [Microsoft is] gonna complain about that, and I don't want to be in the middle of a controversy there, but you need space," he said.
When asked about recent mixed statements from Microsoft about whether a game that requires a hard drive will be allowed on 360, Pitchford confirms that such a release is possible. "I don't know if [Microsoft is] gonna complain about that, and I don't want to be in the middle of a controversy there, but you need space," he said.
via maxconsole