As above comments, games can be compressed, in fact PS4 has a hardware decompressor for rapid on the fly unpacking of compressed data.
PlayGo/Play as you download works on pretty much every game and works the same way disc games work, install a GB or two, then start and dowload the rest in the background.
As for speeds I get it's hit and miss, sometimes it's painfully slow, which feels more like a software problem rather than server problem, other times it maxes out my line speed.
PS, PS2, Gameboy Advance, PS3, PSP, PS4, Xbox One







