To run these files, you need a reliable emulator. The performance of a compressed file depends heavily on the software reading it. PCSX2 (Windows/Linux/Mac)
The emulator will decompress the game in RAM as you play. You will notice slightly longer loading times (5-10 seconds) but zero storage waste.
Let’s assume you found a file named God_of_War_2_USA_HR.7z that is 600MB.