Wouldn't it be even faster than installing it on the hard drive? Flash memory is much faster. Unless the console just doesn't utilize it well.
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I think the problem is the speed of the USB 2.0 ports on the 360. If it was USB 3.0 then maybe it would be faster.
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I have no idea, i would love if that was the case, but i have an old 360 model it might not work as well with it than a Slim or Elite version would.