Yesterday, Microsoft’s press event at E3 revealed a new direction they intend to take the Xbox—into the realm of becoming an Internet entertainment center—but also away from trapping all of their content on that box by allowing players to carry their personalization with them. As a result, Xbox LIVE is moving themselves into the personal cloud.

Due to a lot of feedback from users, Xbox LIVE’s Major Nelson has announced a new initiative by Microsoft to offload the personal customization, game saves, and achievements into the cloud:

Here at Xbox LIVE we listen to your feedback. We are making it easier for you to sign into your Xbox LIVE account from any console at any time to access your game saves and full profile, including items such as Microsoft Points to make purchases, Achievements and friends. Cloud storage will allow you to enjoy the same great Xbox LIVE gaming experience even when you’re not in your own living room by giving you the option to store your “game saves” securely in the Xbox LIVE cloud instead of on a portable memory unit or your console’s hard drive. Gone are the days of “gamertag recovery.” Now all you need to do is sign in, no matter where you are!

In the past, players were forced to put all of their game saves, customization, personalization, and anything else related to their game play experience either onto the local storage of the device that they used on a regular basis (hard drive or internal memory) or onto a little portable save card. If we played our games on more than one console—say at two different homes—we’d have to eject that card, pop it into the CD case along with our games, and truck it along with to the second abode.

This led to a number of problems: forgetting to take the Flash-memory card with our save games and having to give up on our current video game career, having to go back to old saves, start over, having to set up the new system how we like it after our little brother mucked it up.

Gone are those days.

With the advent of using Xbox LIVE to store this information, the Xbox becomes more social. Xbox LIVE subscribers can now go over to a friend’s house and show off where they are without having to truck along portable storage. They can also bring their customization along without mucking up their friend’s box. If nothing else, it makes the Xbox much more of a tailgate experience.

Other examples of the personal cloud coming into the living room (in the same way Xbox already is) coalesce around Apple’s iCloud initiative—which could fundamentally change how we experience entertainment and access our information. As a gaming console, Xbox will be more about entertainment and gaming than it will be about running our personal lives; but many gamers have a giant social network built through the games that they play.

Pushing that social experience into the cloud also means potentially giving access to Xbox LIVE from smartphones so that we can coordinate game times with friends while out and about. Xbox Party invites appear on our phone thirty minutes before we get out of work, we coordinate together where to go (home or to their place) and there we go. We’ve already seen Microsoft dabble in this experience with Windows Live Messenger and Bing with casual games.

It’s about time they leap into the personal could with the Xbox and this is the first step on that long glass staircase that will lead them there.