Before diving into the "how," it is crucial to understand the "why." You cannot treat a PKG file like an MP3 or a DOCX file and simply change the extension.
For PS3 users, the conversion process typically involves a two-step "liberation" method. This is because PKG files are designed to be installed to an internal hard drive, whereas ISO files act as virtual discs that can be run from external media. : how to convert pkg to iso