It may compress that much. It depends what the file formats used in the game are stored as. Image/video/model files may compress quite a lot.
I know that model files certainly do.
Model files may well compress quite well (though I haven't got much of a clue when it comes to them I'm afraid!) but I would've thought images and video would be pretty well compressed already so might not shrink down much if at all.
As others have said this really depends on what you're compressing - if you zip a FLAC file up, then chances are it'll actually take up more space because of the overheads of putting it in a zip archive (and flac compressed audio is about as good as you can get lossless for that purpose.) At the other extreme I've seen a 4GB wordlist zipped up into a few MB (the wordlist in question used mainly repetitive sequences which made it dead easy to compress using vectors.)
It also depends whether we're talking about lossy compression or lossless, and general purpose compression algorithms or specific ones. Using lossy compression you could probably compress a whole DVD down into a few MB or less, but the quality would be absolutely dire! And if you zip up an uncompressed WAV file it's going to be far bigger than encoding it to lossless FLAC.
Assuming we're talking about general purpose, lossless algorithms then RAR is possibly one of the best - it's more flexible than zip and usually fits more data in (especially if you use the "best" compression option in winrar or similar.) However, even this will differ between different types and sizes of files...!