PS5 storage fills up faster than most players expect. A single modern title can consume 80 GB to 150 GB, and the console ships with only around 667 GB of usable internal space. That leaves many players facing a choice between two genuinely different solutions: a USB external hard drive or an M.2 NVMe SSD installed in the console's expansion bay. They're not interchangeable, and understanding the difference matters before you spend any money.
What a USB external drive actually does on PS5
The PS5 does accept USB external drives, but with a hard limit on what they can do. A USB drive cannot run PS5 games directly. Full stop. Sony's architecture requires PS5 titles to load from fast NVMe storage, so external USB drives are restricted to two functions: storing PS5 games that you move off the internal SSD and playing PS4 games natively.
Moving a PS5 game to external storage is quick and simple, but you'll need to copy it back to the internal SSD before you can actually launch it. That copy takes minutes for a large title. It's a workable solution if you have a rotation of games you aren't actively playing, but it adds friction every time you switch back.
PS4 games, on the other hand, run directly from a USB drive without any transfer. That's genuinely useful if you maintain a back catalogue of PS4 titles alongside your PS5 library. A 4 TB external drive currently costs under $150 AUD, making it a cheap way to archive a large PS4 collection. It won't give you faster load times on those older games, but it keeps everything accessible.
The PS5 accepts drives formatted to FAT32 or exFAT connected via USB 3.0 or better. Most portable drives sold in Australia today meet that standard. One practical catch: if you're buying specifically for PS4 game storage, check that the drive is USB 3.0. USB 2.0 drives technically work but perform poorly enough to cause stutter in some titles.
What an M.2 SSD actually does on PS5
An M.2 NVMe SSD installed in the PS5's internal expansion slot behaves identically to the console's built-in storage. PS5 games install to it, load from it, and run at full speed. It's the only way to permanently expand the pool of storage that PS5 games can actually use without manual copying.
Sony requires a minimum sequential read speed of 5,500 MB/s for the M.2 slot, though drives rated above that figure don't produce meaningfully better in-game load times in practice. As covered in more detail in our piece on PS5 SSD speed and whether it actually matters for gaming, the bottleneck sits in the game engine's asset streaming rather than raw transfer rates. A well-reviewed drive at the minimum spec performs almost identically to a flagship model costing twice as much.
The physical installation is straightforward. It involves removing the side panel, inserting the drive in the M.2 slot at a slight angle, and securing it with a single screw. Sony's own support documentation walks through the process, and the console formats the drive automatically on first boot after installation. A heatsink is recommended but not strictly required for the slot to function. Many M.2 drives sold for PS5 include one, and third-party heatsinks start around $10 AUD separately.
One constraint that catches buyers out: the PS5 accepts M.2 drives in the 2230, 2242, 2260, 2280, and 22110 form factors, but the vast majority of drives on the market are 2280. Double-check physical dimensions before buying.
Cost comparison in Australia
Pricing in Australia as of mid-2026 puts a clear gap between the two options at lower capacities, with M.2 drives becoming better value at the higher end than they were at launch.
A 1 TB M.2 NVMe SSD rated for PS5 use costs roughly $100 to $130 AUD from retailers including JB Hi-Fi and Scorptec. A 2 TB drive sits around $180 to $220 AUD. By contrast, a 2 TB USB external hard drive typically costs $80 to $100 AUD, and a 4 TB model lands around $130 to $160 AUD. The external drive wins on raw capacity per dollar. The M.2 wins on actual usability for PS5 titles.
There's also the question of what you're actually expanding. If your problem is "I have too many PS5 games and I can't fit them all," an M.2 is the only real fix. If your problem is "I want to archive my PS4 back catalogue without deleting anything," an external drive solves it cheaply.
Which one is right for you
The honest answer depends on what you play. If your library is primarily PS5 titles and you're tired of deleting and reinstalling games to make room, the M.2 SSD is the correct choice. The installation takes under 30 minutes, the performance matches the internal drive exactly, and you never have to think about it again.
If you still play a lot of PS4 games and want them all accessible at once, an external USB drive is genuinely the better fit. You get far more capacity for less money, and PS4 titles run from the external drive without any hassle. Some players run both: an M.2 for PS5 titles and a USB drive as a PS4 archive.
One scenario where the external drive disappoints regardless of intent: using it as temporary overflow for PS5 games you plan to return to regularly. The constant back-and-forth copying adds enough friction that most players stop tolerating it within a few weeks. If you find yourself doing that more than occasionally, the M.2 will pay for itself in convenience alone.
It's also worth checking whether your PS5 has encountered any storage upgrade pitfalls specific to your firmware version before you buy, since certain drive and heatsink combinations have had compatibility quirks across different console revisions. A quick check before purchasing saves a return trip to the retailer.
The bottom line
USB external drives and M.2 SSDs solve different problems on PS5. The external drive is a cheap archive for PS4 games and a parking space for PS5 titles you rarely touch. The M.2 is the only way to genuinely expand the console's playable PS5 storage. Buy an external drive when cost per terabyte is the priority. Buy an M.2 when you want the problem fully solved.