.Keys: What I cannot understand is why and how 120 gb.
Are the assets that engine dependant that they can't be compressed?
No is not specific to unreal. Modern games have a setup where each object, character, clothing, tree whatever, has at least a 3D object + diffuse texture (the colors you see in game) + a complex texture that has information about reflection, shines, so how it reacts with the light) + a normal map texture that has information about the 3D roughness of the texture. each of these textures can be 20, 30 or more Mb. so 100 of these textures (and each object can have at least 3 of them) add up to 3Gb. Original oblivion also had these type of multiple textures but they were smaller in size so the files were smaller.
You can't compress them because it will look bad on high resolution screens. And you can compress them because they are used uncompressed inside the GPU. Compressing and decompressing them (like you do with a zip/winrar archive take resources and time and loading will take forever) Also if you load and unload objects at runtime, which most game engine do if you want to have an open world no loading experience, if you do this compress decompress you will have framedrops everywhere. In fact is common for many games to have these hiccups because they don't know how to deal withe these load and unload resources on the fly.
tldr: they optimize them a lot, but if you want quality you can't remove too much information