[quote]"Your friend has yet to purchase and play Destiny: The Taken King. Once they have completed the necessary steps, you will be Linked Friends."[/quote]
If you are seeing this error, it means the license for TTK is not currently owned under your friends account. If they are accessing TTK content; they may be doing so via license sharing which is not supported for the refer a friend program.
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Thank you. He says he is using a disc he just bought, but I'll double check.
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The disc itself is just the base Destiny game. The DLCs are unlocked via the codes that would with it. Your friend may want to verify that the codes were redeemed under their profile.