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It's not downloaded, no.
For a physical copy of a game, it goes:
Physical disc -> Internal storage via one time install, and then internal storage -> RAM -> CPU etc etc. Once game data is installed to internal storage, you'll never read any data from that disc ever again (unless you uninstall the game ). At that point, the only thing the disc serves as is a license key to play the data installed on the internal storage/if you want to install the game again after uninstalling it.
Sometimes games might not come with all the data on the the optical disc (as right now the largest Blu-ray disc the PS5/Sexbox will read is currently 100GB), so in that case you might also have to install additional information (IIRC, CoD Cold War for example has like a 50GB update you need to install before it can be played), but it's still just a one-time download and is loaded from the internal storage, you'll never have to stream assets from the internet every time you start a game.
For a physical copy of a game, it goes:
Physical disc -> Internal storage via one time install, and then internal storage -> RAM -> CPU etc etc. Once game data is installed to internal storage, you'll never read any data from that disc ever again (unless you uninstall the game ). At that point, the only thing the disc serves as is a license key to play the data installed on the internal storage/if you want to install the game again after uninstalling it.
Sometimes games might not come with all the data on the the optical disc (as right now the largest Blu-ray disc the PS5/Sexbox will read is currently 100GB), so in that case you might also have to install additional information (IIRC, CoD Cold War for example has like a 50GB update you need to install before it can be played), but it's still just a one-time download and is loaded from the internal storage, you'll never have to stream assets from the internet every time you start a game.