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Games are rising in terms of required storage space, so be ready with an expansion card so you can do it all.
That doesn't mean there's no value in an external hard drive or SSD; instead, you'll want to use your chosen external device for Xbox One, Xbox 360, and Original Xbox games via backward compatibility.
Both allow for native performance that's on par with the Xbox Series X's very speedy internal SSD. Keep in mind that you cannot boot Xbox Series X games off of an external hard drive right now ...