The PS3 will not recognize MKV files. You need to convert them first. I use a program called TSMuxeR. Its fast and you will not lose any video audio quality. After you download it, open and click ADD under the Input tab. Find the file you want to convert and add it. Under TRACKS look at the first file. Under TRACK INFO, it should look something like this; Profile: High@4.1 Resolution: 1080. If your profile is higher than 4.1 you need to click on CHANGE LEVEL under general track options and change it to 4.1. If it is already 4.1 or lower leave it. Next go to output and click on M2TS Muxing. Click START MUXING. It will take a few minutes to complete. When its finished go to wherever your original file is and you should see two files now. One is the MKV and the other will be AVCHD Video file. Transfer the AVCHD file to your PS3 by flash drive or external drive and enjoy.