It's not compression. It doesn't download the entire files to be patched. They haven't revealed their method or if it's proprietary or not, but if you're familiar with an IPS file you'd have an idea how it can work. An IPS file contains only the differences between file A and B, so it's a much smaller file to transmit when upgrading a file. It used to be very common for software updating in the dialup days.
Games frequently use uncompressed archives to hide their data files - you only need to download the files in the archive and then reassemble them, not the entire archive.