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So, if your USB drive has a larger volume size and you can actually use it, you are most likely using FAT32 or exFAT. The latter is unlikely though.
If you use FAT then you wont e able to install some games as fAT as a file size limitation
You might as well go wtih FAT32, there's no real good reason to be on FAT
for USB sticks it is for creating botoable USB sticks espacially combined with odler hardware. Otherwise you're right there is nor eason to get FAT and not just simply use NTFS.