The installation failed or the package is corrupted.
Unlike ISO files (which mimic physical Blu-ray discs), PKG files install directly onto the PS3 dashboard (XMB) just like a legally purchased digital game. Prerequisites for Using PKG Files
You will often hear terms like "CFW2OFW" (Custom Firmware to Official Firmware) regarding PKG files. These are specially modified PKG files designed to run on OFW consoles that have the HAN/HEN exploit enabled. However, standard PKG files will not work on an unmodified retail console.
Use the file manager within these apps to locate your external drive ( ntfs0: or usb000: ).
Once your USB drive is prepped, safely eject it from your PC and plug it into the right-most USB port of your PS3 (this port is closest to the Blu-ray drive and offers the fastest read speeds). For PS3HEN Users: