The term "PKG" refers to a Package file. In the official PlayStation ecosystem, a .pkg file is an archive format used by Sony to distribute software, game updates, patches, and digital content via the PlayStation Network (PSN).
If you are searching for a "free" copy because you do not own a PS3, you might be better off playing via the RPCS3 emulator on a PC. RPCS3 is a free, open-source PlayStation 3 emulator. demon souls ps3 pkg free
While Sony rarely sues individual downloaders, ISPs (Internet Service Providers) in the US, Germany, and Japan actively monitor torrent swarms for copyrighted Sony titles. You may receive a DMCA strike or a fine. The term "PKG" refers to a Package file