The Xbox Series S won't actually have the advertised 512GB of free SSD space available to consumers. Instead, the storage availability will shrink quite a bit and only fit a handful of AAA games.
At $299, the Series S seems great on paper. But adding up all the disadvantages makes it a tougher sell--it's digital only, a tremendously weaker GPU aimed at 1440p 60FPS, and now limited SSD space. According to a consumer who got their Xbox Series S console early, the system only has 364GB available for games, apps, and data.
This is par for the course for hard drives and SSDs. No storage device has the advertised value because the drives have to be formatted. After formatting, the Series S' 512GB SSD turns into a 467GB SSD. Then the operating system, APIs, and other features reserve space and take a further bite out of available storage. The Series X's SSD is actually shrunken even more, and only has 800GB of free space on a formatted 931GB SSD.
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If the Series S only has 364GB of usable space, this is 28% less than the advertised 512GB. It's also alarming for gamers who play free-to-play live games, especially those like Warzone, which has ballooned to 100GB+ on consoles and PC.
This limited space pushes owners to buy the expensive 1TB expandable SSD card for $217, which would add 921GB of useable storage to the system. It would also add a significant extra cost to the console--a cost that would effectively make the Series S cost as much as a Series X.