Arc will not succeed. It might sell decently, but it will not achieve it's intended goal.
It is aimed at usurping Nintendo's strength. This will not happen. The market that bought the Wii is not interested in buying a PS3+Arc. Why? Because they are not interested in Sony's current software library. If they were, they would have a PS3 already. Therefore, the competition will be thus;
Wii=199, games=49, Motion+=19, Software=4 year library
PS3=299, games=59, Arc=Let's say, 59 with a camera, to be nice, Software=15? 20?