UPDATE: We've since been contacted by Official Nintendo Magazine - the source of this particular piece of news - to clarify a few points. According to ONM, a post on the Japanese Wii U website was "misinterpreted" and it has NOT been confirmed by Nintendo that software cannot be played directly from storage media. ONM have contacted Nintendo for an update, and we'll keep you informed as soon as we hear the outcome. In the meantime, the original story is below.
ORIGINAL STORY: One aspect of Wii U that’s had a few people biting their nails with apprehension is the storage capacity of the console itself. With the Wii U eShop promising to be the biggest digital store on a Nintendo home console to date, it’s understandable that people may not think the 32GB capacity of the premium system is enough. For example, Tekken Tag Tournament 2 Wii U Edition will be available to download from the eShop in Japan, but it comes with a hefty file size of 16.7 GB, more than half of the entire premium Wii U capacity.
While we knew that external hard drives would be supported, details of how these USB storage solutions will be used have now emerged. Unfortunately, external devices are apparently — according to the source article, there is doubt — for storage purposes only and games cannot be played straight from the drive; so if you want to play something it looks like you'll need to transfer it back onto the console first. It is clear that you won't be able to make a copy of the data, so if you’re considering sticking a game onto a USB memory stick and heading over to your friend's house with it, don’t expect to be able to play anything; in addition each USB storage device will only be able to work on one Wii U console. Perhaps most intriguingly, while an SD card is used as part of the Wii to Wii U transfer process, you can't store Wii U eShop download software on that format.
So, what do you think? We bet you never thought you'd be asking Santa for USB storage this Christmas!