The proprietary memory card is going to be necessary for storing/accessing new titles designed to make use of their Velocity Architecture, any old external will do for games Xbox One or back-compatible games.
Not sure why they didn't enable storage tiering for regular external HDDs.
It would be far faster to move a game from external HDD back to the Velocity SSD before playing than to download the entire game again from the internet.
> Not sure why they didn't enable storage tiering for regular external HDDs.
They did: "A USB 3.1 drive can also carry Xbox Series games as storage, which can be transferred to Series X or S's internal SSD or Storage Expansion Card to then be played."