Initially, transitioning to discs actually left us with too much space. Games weren’t anywhere near big enough to fill up a whole CD, but the nature of a spinning disc actually means that the outer part of the disc spins faster (and can be read faster by the laser) than the inner, so we would actually pad the disc to full with dummy data in order to get faster game data reading speed. EA actually had to recall a game once because the engineers padded it out with Simpsons episodes.
Space on disc eventually became a larger problem as game sizes increased. We eventually had to start splitting games across multiple discs (if you’ll recall, the original Final Fantasy 7 launched with 3 CDs of game data) to make them all fit, as well as technology to allow the same game to load itself into memory and remain resident while players swapped discs. There were also technical issues that arose from streaming data from the disc that we had to solve, since disc access is a lot slower than reading memory or a hard drive.
Game dev tends to grow to fit its environment. If you give us more processing power, somebody will figure out clever ways to use it. If you give us more space to work with, we’ll figure out ways to use it. If you give us more memory, we’ll figure out ways to use it. We’ll hit the upper limits and then, since we still want to make things cooler and better, we’ll figure out clever ways to optimize that we hadn’t before.
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