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1 Online Update. Press the Guide Button on your controller. Xbox 360 Controller with Guide Button highlighted. Select Settings at the top. Select System. manually update my xbox 360 via USB · Plug your USB flash drive into a USB port on your computer. · Download the update file. · Click Save to save Step 1: Download the Offline System Update file (OSU1) · Plug your USB flash drive into a USB port on your computer. · Open the Offline System Update file OSU1. Manually Update Xbox 360 System Software · Plug your USB flash drive into a USB port on your computer · Download the update file · Click Save to save the console