This software includes the operating system as well as many system, game, and media apps for the Xbox One.During a system update, the software on your console is updated through a download-and-install process.
The updates will be downloaded from the Xbox Live service directly to your Xbox One and subsequently installed.
There are two types of system updates you’ll see: available system updates and mandatory system updates.
Each night, when the console is in Instant-On mode, it will check to see whether any updates are available.
By default, these updates will be downloaded and installed when the console isn’t being used.
This reduces the impact updates have on your Xbox One experience, and they won’t block you from connecting to Xbox Live until they become mandatory.