Earlier this month it was rumored that e-commerce service PayPal would be the biggest addition to the Xbox 360's newest system update. Now, Microsoft has confirmed that speculation.

　　Microsoft has added a new way to pay for Oblivion's Horse Armor. Microsoft's director of Xbox Live programming, Larry "Major Nelson" Hryb, today made the announcement on his blog, saying that gamers will soon be able to make purchases on Xbox Live using their PayPal accounts. Previously, gamers could pay for items on Xbox Live only with a credit card or by redeeming Microsoft points. PayPal is currently an accepted method of payment only on Xbox.com.

　　PayPal will not be available on Xbox Live in the following regions: Brazil, Chile, Colombia, the Czech Republic, Finland, Greece, Hungary, India, Japan, Russia, South Africa, South Korea, and Taiwan.

　　As for the new system update, Microsoft today started rolling it out globally, saying that it will take up to two weeks to reach all regions. Also included in the update is a new "auto-standby" feature. Billed as a power consumption reduction method, the new feature (which can be toggled off) sets a console on standby if it is left idle for more than an hour.

　　Additionally, the update brings an updated Xbox 360 disc format, which was recently confirmed as not being the root of some disc-read errors.