Yes an entire generation of games running on a mere 2MB of RAM and 1MB of VRAM.
The crazy thing too was how much a step up PS2 was compared to PS1 in terms of available compute and sheer horsepower. But even that wasn't enough for a sandbox game like GTA 3 to run without a lot of clever tricks [1]
Interesting video, we also made a PS2 game with streaming and fragmentation was definetly the worst part (as we also used Renderware) and funnily enough iirc the release version also had a built-in defragmentation system to move memory around (an annoying thing to do in C++ projects that weren't prepared for that from the start).