I know you have to download the upgrade, and well some of those upgrades may need SSD (for improved loading for example), but I believe you will be able to install and play the upgrade from the external drive.

PS5 consoles were sent to reviewers in America just before the weekend and it looks like consoles have been sent out to European reviewers today (PS Access and Digital Foundry are both based in the UK).

Yeah they should work. I plan on storing and playing my PS4 games on my 512GB USB thumb drive which is basically works like an SSD but any external HDD should work. Bearing in mind some games like Cyberpunk (next gen version) might require an SSD to work.

What I plan on using -

A bit overkill but I haven't had much use of it since I bought it and its relatively fast and out of the way when plugged in at the back.

Awesome can't wait to see DF's preview. They should send one out to smaller Youtubers like NXGamer as well as he does really good technical breakdowns.

Why is freddie mercury on Uncharted? Are they going to find a relic song?

This is an interesting alternative until SSDs are cheaper.

Regarding bold: Will you get some of the same benefits with this as you would with an NVMe M.2 SSD?

@Replicant

Not sure how my particular USB drive will performs but most SSD's - even when plugged into USB, should benefit games based on current gen. You will benefit from reduce load times verses mechanical harddrive even if its like 350-500MB/s. This particular drive can read almost as fast as a SATA based SSD (at 350MB/s). Whether its worth the cost to you is another matter. I got it on sale, which was really good at the time. But value wise you can do much better now.

The good thing about PS5 is the superspeed USB 3.1 Gen 2 ports. Which means that it can support transfer of real time read speed of up to 1.25Gbps. Technically you could buy the highest capacity NVME drive and get the most out of it and and external adapter like this plug it into your PS5's USB port and store your PS4 games on there; and enjoy fast load times. Else a larger capacity external harddrive is a better option for most people as it most cost effective. That or you can wait for PS5 compatible Sony certified NVMe drives that will play both PS5 and PS4 games but they won't come cheap. Though prices will fall eventually.

Edit: Also you could actually buy a lower specced NVMe SSD and slot it in PS5 expansion slot, but we haven't had confirmation that it will work for use for storing and playing PS4 titles and will most certainly not work on PS5 games.

@hinch - It's going to be a while before I run out of space as I tend to have under 10 games installed at a time but I'll look forward to hearing how playing games from a USB 3.1 works out for you and others.

Destruction AllStars has been delayed to February 2021 (link). At launch it'll be free with PS Plus for 2 months.
Will probably be better for it. It doesn't seem to be ready to be shown off and there's currently not much hype for it.