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It means there is a hardware failure in your PS3. This could be due to overuse or abuse of your PS3, or just wear. You will have to buy a new PS3 or send it in to Sony to get repaired. If you buy a new PS3 you can take your hard drive out of your old PS3 and put it into the new one to retain your save files.

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Q: What does it mean when playstation 3 flashes yellow?
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