In my opinion, this game is NOT an expanded market game. It has level creation and level creation is hardcore with a capital H.
How do you draw in new gamers with level creation? Show a dude sitting around making a level? Surely that would be the most boring video game commercial ever. Level creation requires a serious interest in gaming and a willingness to put in at least a couple of hours of work to make a really good level, no matter how easy it is.
In other words, this is a game for a very specific niche, and it shouldn't surprise anyone that it didn't have blockbuster sales.
As for the whole mascot thing, Sony already has a couple of options for mascots (Jak and Daxter, Ratchet and Clank) but for whatever weird reason it doesn't seem to want to commit to any of them. I must admit Sackboy would be the best option yet.