Can games be installed on an external HDD?

[Legolas8181]

I want my new laptop to be fast but am also on a budget so a 120GB SSD is great because while it's big enough to store Windows and some games it is still within my budget but for the rest of my games will they install onto a 3TB external HDD?

 

[megaTHE909]

Yes games can be installed on an external drive but performance may suffer in some drives. also this complicates finding files such as savegames a little