How can I install large Apps from App Store on and external disk I can't download extremely large games, because App Store says there's "not enough space to install the product."

This is not unexpected, but I do have a USB-C 2TB SSD always connected and I'd like to install things there. 

Is there a way to change where games get installed from App Store?
No. Move other files to the external drive to free up space. Then once you have installed the app, move it after it’s done downloading and installing. 

You need free space on the system drive for many reasons and one is App Store and installing apps.