When you are programming a game like poker of battleships where you need to hide...

with private state variables. This way nobody else other than the smart contract itself can see the information

with external contracts holding those values. This way we can make sure that the information flow is following a clear logic and nobody else can access this information.

You can't hide anything on the blockchain, because the information is public, just the call is private which means only other smart contracts would be limited in accessing that information.