“PKG” can mean several formats. This digest assumes you have a filesystem-like package/archive (e.g., Sony/PlayStation .pkg game installers, macOS installer .pkg, or generic .pkg produced by packaging tools) and you want a single ISO image that contains the package contents (for distribution, mounting, or booting). If you meant a different PKG (firmware or proprietary encrypted formats), additional steps are required.
This is often done to play digital-only games on consoles with custom firmware (CFW) that prefer disc-image formats. how to convert pkg to iso 2021