You wanted install the project template under desired project category, you tried changing .vsix extension to .zip and it didn’t work out. The solution is simple.
This MSDN article describes how to create a VSIX package for a project template; but if you want to make your template visible under a desired project category the method mentioned in the article doesn’t work for some odd reason. Most of the times when a .vsix file is edited the installation fails.
You do not need to change the extension and suffer, when you create the VSIX in Visual Studio create the folder structure you want your template to appear under the Project Templates folder. (The article says the same thing but it suggests to create the structure outside the Visual Studio by changing the extension).
You can get the project template folder names from this path – <visual studio installation path>\Common7\IDE\ProjectTemplates
In a typical installation structure the path would be – C:\Program Files (x86)\Microsoft Visual Studio 12.0\Common7\IDE\ProjectTemplates
For example I wanted to install my template under Web projects.
This works perfectly fine and just by building the project you get the desired installation and no outside editing of the .vsix package.