I have a spare m.2 Samsung evo ssd. I want to install the new Microsoft flight sim on it.
Should I use this SSD for the system drive & install flight sim on there. Or use this ssd as a separate gaming drive, & will this make a speed difference?
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You should do whatever you want.
M.2 (NVMe) will be faster than standard SSD, and both are faster than HDD. How you prioritize what goes where is totally dependent on personal preference. As far as gaming goes, disk speed will only affect loading times, not FPS, network ping, etc.
Personally, I put the OS on on M.2 (PC boots in about 8 seconds, it's awesome!). There's a little left over space for one or two more games. I keep my high end multiplayer games on there. I then have a small-ish (250GB) SSD. Most of my games go on there. Then I have a much larger (2TB) 7200 RPM HDD. Thats where everything else goes: most single player games, retro games, homework, projects, giant files, etc.
Note that RAM speed (and other components) will also affect loading times of a game, so a faster drive does not always translate directly to faster load times.
For a good high level comparison of NVMe vs SSD vs HDD check out this page.