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It was not uncommon to require 2 or even 3 memory cards for the PSone, Dreamcast or Gamecube and in no small part because the capacity of official cards was always kept very small.
That's why there were so many high-capacity 3rd party alternatives.
Official high-capacity Dreamcast (without the VMU screen) and Gamecube (4x capacity) only appeared well into those consoles lifetimes.
A PSone memory card only had 15 blocks and, for example, a Gran Turismo 2 save took up 4 of them.
Animal Crossing for the Gamecube used up an entire 59 block memory card (the save file could actually reach 60) and so the game even came with one!
If you buy a 120gb or even 250gb HDD for the Xbox 360, you're going to be able to download a good few entire games, loads of DLC and you just don't even think about the space needed for actual saves.
So yeah, even at the inflated price for a 360 HDD or memory stick, I still think its very good value compared to the memory card days.