Today when I was installing Kali Linux 2016.2 64bit version on my virtual machine on Vmware Workstation. Not long after the installation was fired up, the error “Installation Step Failed (installing the system)” kept occurring. After some research, I finally found out the problem; I can only install it with single partition if I encounter this error. Not sure the specific reason why two or multiple partition schemes will cause the error though. So, if you want to solve this weird problem, just install it as single partition!