You install it via the "Install Package Files" option on a PS3 running Custom Firmware (CFW) or HEN.
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If you are looking to download the game now, here is what you need to know about the available formats: Download Formats & Sources You install it via the "Install Package Files"
Overview
Before you rush to download a 20 GB ISO, understand the reality. Little Big Planet 3 on PS3 is a technical marvel... and a mess. Instead, we recommend searching for trusted gaming forums