Yep, compression is on and I think that's what does it considering how large games are these days.
I stay away from XFS, every time I have used it in the past my entire drive have ended up scrambled within a few months. It's by far the worst file system I have ever used, not even FAT32 was that unstable for me.
Most large games are already compressed in cabinet files or similar so OS/file system level compression wouldn't gain you anything. While there are games that ship with loose files, like the Elder Scrolls series, other games like Diablo IV or CoD use archives.
