I've recently been using quite a few models that have several textures that needed to be imported into the engine, but on every convert to .gfx format I end up getting 5mb texture, which can really stack up quickly. 5MB texture is usually for 2048 resolution image. I'm wondering if there is a way to compress the file size to be smaller, or a certain format that works better than the others. I tried the converter tool, and it seems to convert textures to about the same file size. I haven't packed the game yet, but is there a way to reduce this large image size to something smaller?

the recommended usage is to create textures using mesh editor,
material mode with "compress" button enabled

other compression methods (via jpeg/zip) aren't recommended because of slower loading times