PlayStation 5 currently doesn’t allow you to install, store or play next-gen games anywhere other than its internal SSD.
As noted by Digital Foundry, next-gen games can’t be played from an external drive, and the console currently offers no options to move your PS5 games into external storage. When the internal SSD is filled, the only option given is to delete games to free up space.
It’s concerning given that the console comes with a relatively slim 667GB of usable storage space, and doesn’t support SSD external storage (which could presumably play next-gen games) at launch. No window