Do you already have Elder Scrolls Online account and linked to your PSN? If so, the game is trying to do two things at the same time:

—Download the Morrowind patch to add to your HD
—Run Morrowind from your physical disc

I had the opposite issue, where I downloaded the Patch before I got my physical copy. When I got my copy, I threw it in the PS4, and it asked me to either 1) Delete my downloaded patch or 2) Not use/remove the disc from the drive.

Try that?

I hate to give you the wrong answer/make you do the wrong thing, so let me put it this way:

If—

1). You already have The Elder Scrolls: Online installed on your PS4 and have created an account, and all you're doing is upgrading to Morrowind via a physical copy, skip the disc. Jump into the PSN/game and have it download the patch (28g). Next time you log in, it will ask if you want to upgrade, and then you can use the code that was in your physical copy.

2). You don't have Elder Scrolls installed, or don't have an account, or downloaded the game but haven't set up an account, I would start fresh with the disc. The disc is meant either as the base game + Morrowind for entirely new players, or just Morrowind for active, current players.

What you want to avoid is creating two accounts for yourself; if you've already created any kind of Elder Scrolls account and it's tied to your PSN, make sure you're upgrading that one. Otherwise you risk creating a new account with the Base game + Morrowind via your new physical copy. Of course if you're entirely new, there's no problem there.

I hope this helps, and perhaps others have some thoughts.

Thanks guys, I found a fix. Delete and reinstall your ESO and it will work