One of the new byproducts of the Xbox Live Preview that is going on seems to be that Microsoft has introduced some sort of new compression or way to reduce the amount of space that a game installed to your hard drive takes.

It is not yet really known is if this is an actual reduction or some sort of bug that is related to the exposure of the time stamping of files for game saves that have now been exposed in the update. The problem is that in order to take advantage of this size reduction, you have to delete the game from the hard drive and reinstall it.

The good news is, however, that it would appear that despite the change that has been made to use less space, it does not seem to yield any performance hit and the load times are the same. This is all good news for those who don’t have a 120GB hard drive and are looking for ways to pick up more space.

What we suspect is that Microsoft has either found a way to integrate some sort of compression into the installation on the hard drive to take less space, or better yet, the company has found a better way to store the actual disc on the hard drive in such a way that it takes less space.

While tongues continue to wag about what could be going on here, we have to admit that it could be that it is nothing more than some sort of a bug; but we just don’t think so. The development of this could be very helpful to Microsoft going forward, as it will most certainly be looking for ways to offer better compression and use less disk space on the Xbox 360 on demand games that will start heading this way soon.