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It means you need to log into your PSN account on both PC and PSP, then link the PSP to your account. Once you've done that, the PSP is authorised to use your PSN details - basically it stops people distributing PSN logins, only someone with access to the account on a PC can authorise the devices.

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12y ago

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Q: What do they mean by ''you must activate the System'' on a PSP?
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