UPDATE: It looks like the idea of archiving PlayStation 5 games to external media is now under active consideration by Sony. An entry on the PlayStation blog says that "explorations for allowing players to store (but not play) PS5 games on a USB drive in a future update are underway."
Original story: Continuing our PlayStation 5 review process, Digital Foundry today presents a guided tour of the excellent new user interface, exploring the menu system and new functionality - and it was during the recording of this video that a couple of inconvenient issues came to light. The big one is this: right now, there seems to be no way of copying PS5 games away from the main system storage, presenting problems when the SSD is full. In this scenario, the only way to install new games is to delete old ones, meaning that to play them again you'll need to re-download them - deleting other installed PS5 games in the process. PlayStation 4 games installed to PS5 are not affected - these can be moved off to external USB storage.
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In common with the Xbox Series consoles, next generation games for PS5 can only be run from internal storage (or the 1TB expansion card, in the case of the Microsoft consoles) and thus far, Sony has not whitelisted any third-party M.2 NVMe drives for extra solid state drive space. However, the difference here is Xbox consoles allow for all games old and new to be archived off to external storage. You can't run next-gen games from there, but at least you can shuttle the titles to and from internal storage without having to re-download them. This does not appear to be a viable solution for PS5.
To test this, we filled PS5's 667GB of available storage with PS4 games, then attempted to install a new PS5 title. The system asks we free up space, exactly as you would expect - and the only way to do that with PS5 game data would be to delete it. In an era where games routinely break the 100GB barrier, this presents problems and we really hope to see Sony address this as a matter of urgency.
Less of an issue, but still more limited than PS4 is the way in which PS5 game save data is handled. On the PS5 user interface, it's still possible to backup and restore PS4 game data from USB. However, the USB option is gone when addressing PS5 saves. This is purely conjecture on my part, but the game save system on PS4 was hacked many years ago - and it's possible to purchase software that tweaks your saves with cheats, or allows you to share your saves with other users, instantly giving them platinum trophies, for example.
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By keeping PS5 save data entirely within Sony's control, this increases security - but at the expense of user convenience. It should be stressed that PS5 does automatically archive save data by keeping it in the cloud, similar to the solution in play on Microsoft's consoles since the launch of Xbox One.
The SSD storage issue - and the lack of PS5 title archive options - is a concern though, and we've approached Sony for comment.