External HDDs are used to play Xbox OG, 360, and Xbone games (Xbone games might use the SSD, but I'm sure they'd use a HDD), the SSD is used for current gen games. You can also store current gen games on the external HDD, and transfer them to the SSD to be used.
The Series S has a 500 GB SSD, PS5 is 800 GB, Series X is 1 TB.
Regardless of what console you get, data transferring or expansion is gonna be a necessity if you wanna play a lot of games at once.