The PS3 is not only a game console, but also a video entertainment tool for you to play video such as video, movies, music and photos on it. The Sony PS3 has two usb ports at the front so that you can copy local videos and movies from your computer to your USB flash drive for watching them on PS3.
File types can be played on PS3
Before going any further, make sure that the files moved to your USB flash drive should be included in PS4 supported file types listed as below.
Memory Stick Video Format
- MPEG-4 SP (AAC LC)
- H.264/MPEG-4 AVC High Profile (AAC LC)
- MPEG-2 TS(H.264/MPEG-4 AVC, AAC LC)
MP4 file format
- H.264/MPEG-4 AVC High Profile (AAC LC)
MPEG-1 (MPEG Audio Layer 2)
MPEG-2 PS (MPEG2 Audio Layer 2, AAC LC, AC3(Dolby Digital), LPCM)
MPEG-2 TS(MPEG2 Audio Layer 2, AC3(Dolby Digital), AAC LC)
MPEG-2 TS(H.264/MPEG-4 AVC, AAC LC)
AVI
- Motion JPEG (Linear PCM)
- Motion JPEG (μ-Law)
AVCHD (.m2ts / .mts)
DivX
WMV
- VC-1(WMA Standard V2)
More hints for playing video on PS3
Some files may not be playable or some control panel options may not function during playback.Some video files distributed over the Internet have playback restrictions. For details, contact the content provider.
To play WMV format files, you must go to (Settings) > (System Settings) and set [Enable WMA Playback].
When using a USB adaptor to play video files, you may need to use a USB adaptor (not included) that supports copyright-protection features (to play copyright-protected files).
When using a USB adaptor to play AVCHD-format video files saved on Memory Stick™ video, use a device that supports Hi-Speed USB (USB 2.0).
WMV format copyright-protected files cannot be played.
Convert unsupported video on PS3 via USB
Although PS3 can handle a large number of codecs, however, there are still some particular file formats with the codecs that PS3 fail to decode or recogize. Don't worry, this codec incompatible issue can be easily addressed with a powerful media conversion program. Here, we highly recommend you to have a free trial at Pavtube Video Converter Ultimate for Windows/Mac (support Mac OS X El Capitan), the program can convert virtually any file formats such as AVI, WMV, MP4, MKV, FLV, MXF even H.265/HEVC is included. Besides common video, you can also remove region code from Blu-ray/DVD disc for viewing on PS3 through USB flash drive.
Two methods to play video on PS3 from USB flash drive
Method 1:
1. Connect your usb flash drive or external hard drive to one of the two usb ports at the front of your Playstation 3.
2. Turn on your Ps3.
3. Go in the main menu to "Video" to play a video or movie stored on your USB flash drive.
4. Go to "USB Device", press on the triangle 
button of your controller and choose "Display All".
5. Press with the X button of your controller on the video, movie to play or view.
Video guide:
Method 2:
1. Create folders on your USB device with the name "VIDEO", "MUSIC" and "PHOTOS" in uppercase.
2. Put all the movies and videos in the "VIDEO" folder, all the music songs in the "MUSIC" folder and all your pictures in the "PHOTOS" folder.
3. Connect your USB flash drive or external hard drive to one of the two USB ports at the front of your PS3.
4. Turn on your playstation 3.
5. Go in the main menu to "Video" to play a video or movie stored on your USB flash drive.
6. Press with the X button of your controller on "USB Device".
7. Press with the X button of your controller on the video, movie, song or picture to play or view.
You may be also interested in: How to Stream and Play Local video on PS4 via Plex
