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usb does not have enough iops for the way steam does that
install game to internal drive, then use steam to move it to the usb drive
when updating, move it back to internal then update, and move back to external
steam download is
download + write + read + unpack + copy, all at the same time
usb can only do one at a time, not all at once
I have 10TB of games installed on a USB HDD and they all install, update and run perfectly fine.
Installing games on external drives is not a good idea.
If so, it is because the HDD can't saturate USB2 bandwidth.
Vast majority of SSDs the past 10 years are capable of saturating USB2.
SSDs were part of the reason we moved from SataII to SataIII, to make full use of the SSD's bandwidth.
Still irrelevant to the OP. I also have multiple external USB3 SSDs that will work fine connected via USB2, just much slower than when they are connected to a USB3 port. I don't normally use those for games, however, I just tested adding a steam library on one of them connected to a USB2 port on my desktop and installed Rocket League on it without issue; just slow to finish downloading the extracting.