Instructions
Plug the USB end of the camera into a USB port on your console.
Place the camera as close to you as possible. Since it is functioning as a microphone only, it should be positioned away from the television and within close range of your seat so it can pick up your voice.
Open the "Audio Device Settings" menu under Settings>Accessory Settings on the Xross Media Bar.
Highlight the input field and hit "X." Press the down arrow until the field reads "USB Camera" and hit "X" again.
Sit where you intend to sit while playing and speak into the microphone to test the volume. Use the volume adjustment fields to turn the microphone down or up if necessary. When finished, press "Circle" to exit the settings menu. Your microphone is now calibrated and will automatically pick up sounds while you are playing games.