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Just to clear it up, the 3rd person is the holder of the account. It is NOT 1 owner and 3 other people. Also In case you do not know what PS4 game sharing is. It’s exactly what it sounds like. Sharing games.
Step 1: Put your account as secondary on your PS4. Your first friend can activate his PS4 as your primary PS4. You can find this option in the settings: Settings > PlayStation Network/Account Management > Activate as Your Primary PS4 > Activate.
PS4 Game sharing - Activate friend's console as your primary console
Congrats, If you made it that far, you’re in “typical” PS4 Game sharing mode: your friend can play and download your games without using your login information because his PS4 is your primary PS4. You, on the other hand, can still play and download your games on any PS4 (including yours) because you have your credentials. You can stop here if you only want to share your games with one Friend, but keep reading if you want to share with a third person.
Step 2: After the first friend has downloaded the games he wants, tell him to launch a game. Only Launching.
NOTE: I don’t have any proof that you NEED to do the launch thing,But I’ve read it on some places so worth trying anyways
Step 3: After this, Login to the PSN Site Online and select the ‘Deactivate devices’ setting. Do tell your first friend not to sign in again though 😛 Can mess things up. The games will still work on his console as long as you do this.
NOTE: This deactivate option is only available every 6 months, so if you’ve already deactivated it once, sorry 🙁 no way past that.
Source -
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credits to Wololo