[url=http://www.gameinformer.com/b/news/archive/2013/03/21/rumor-next-xbox-will-require-that-games-be-installed-on-hard-drive.aspx]Source (Game Informer)[/url]
Yes, installing a game makes for better performance...but making it mandatory? Now that's just stupid.
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Meh, I install all my games to my Xbox's HDD anyways. Dem fast load times. And if storage becomes an issue, there's bound to be a firmware crack that'll let you drop in a bigger drive. You can jam a 1TB drive into existing 360s with some... modification.