Ah I thought the idea was to make the whole program use nothing but mov instructions. Still cool though. That's an interesting point too about console games, it seems to make a lot of sense if the whole machine can be dedicated to running just your program
Malloc isn't particularly more special than any libc function. It simply supports the fantasy that the memory is unlimited in scale. It was always of a static size, you were just handing off the chore of dividing it up. You can usefully implement dynamic sizing in languages with static memory allocation by pre-allocating large arrays and then maintaining handles and liveness flags. This is, in fact, how every console game used to do it until available memory sizes got into the hundreds of megabytes. Fragmentation and the subsequent crashes from OOM presented too much of a concern before then.
[0] https://github.com/xoreaxeaxeax/movfuscator