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It could be the other account was banned. What happens when you try, there is a limit on the total number of PS3 accounts.

When you try to create a Playstation account do you get past the first screen shown on the related link

If you are having difficulties registering a specific Online ID, it may be already taken by another user. They suggest trying different unique names.

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Q: Why wont ps3 let you create a new Psn accoumt?
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